The owner of Black-eyed Pea restaurants in Texas filed for Chapter 11 bankruptcy reorganization Wednesday, saying it has been unable to attract new capital in the last two years and has closed 15 stores in the wake of shrinking profits.
Arlington-based Restaurants Acquisition I, Llc. said it twice hired investment bankers “to address a recapitalization or sale,” but no offers were received, according to the petition filed in Delaware. Those attempts were made in December of 2013 and again in April, the filing said.
As of January, the company said it was operating 30 stores in Texas. The petition was not clear when the stores were closed. It was locked out of one store, but the petition did not disclose that location.
The company says it’s now operating 14 stores in Texas and one in Henderson, Tenn. According to its website, there are two restaurants in Arlington, and one each in Hurst and Fort Worth. Most of its Texas stores are in the Dallas-Fort Worth and Houston areas. The restaurants include one Dixie House location on Gaston Avenue in Dallas. That restaurant is not related to the Dixie House Cafes in Tarrant County.
“Since late 2013, [Restaurants Acquisitions I] has experienced a decline in its cash flow performance,” the petition said. “At the same time, [Restaurants Acquisitions I] occupancy costs outpaced its revenues over the same period.”
Restaurants Acquisition I said it has fallen behind in paying creditors, and because of its “liquidity crisis” also owes various taxing authorities, including the Internal Revenue Service.
In its bankruptcy petition, the company listed assets between $1 million and $10 million, and debt between $10 million and $50 million. Its largest creditor is US Foodservice in Dallas, owed $881,050.
At full operation, the company employed 1,800 workers, but following the closings it has about 875 hourly-paid employees and 75 salaried employees. The company is seeking court permission to continue paying employees and vendors, and honoring $286,570 in outstanding gift certificates, the petition said.
Five Black-eyed Pea locations in Colorado are owned by RMR Colorado, Llc. and are not involved in the bankruptcy filing.
Black-eyed Pea was founded in 1975 by Dallas restauranteur Gene Street. It has had other owners over the years, including a group that went through bankruptcy in 2001, according to reports.