On Sunday, October 4, a dozen True Food Kitchen restaurants served their final customers. By that evening, the Phoenix-based chain, which counts Oprah Winfrey among its backers, had filed for Chapter 11 bankruptcy protection in Texas. Court papers list roughly $42 million in debt and describe a company that had been under strain for years. One figure buried in those filings shows just how little cushion the chain had on the day it filed.
True Food Kitchen Entered Bankruptcy With About $1.6 Million in Cash, Roughly Two Weeks of Runway
According to a financial adviser’s statement in court documents, reported by Fox Business, True Food Kitchen held about $1.6 million in unrestricted cash when it filed. That amount could cover operations and bankruptcy expenses for only about two weeks without outside financing. For a chain that had grown to 46 restaurants, it was a remarkably small cushion. Before filing, the company had lined up a lender to cover the gap, and the court papers name it.
HumanCo Commits About $20 Million to Keep True Food Kitchen’s Doors Open Through Bankruptcy
The lender is HumanCo TFK IV, which committed about $20 million in debtor-in-possession financing, subject to court approval, according to Fast Casual. Combined with cash from operations, the money is meant to carry the company through Chapter 11 and a court-supervised sale. CEO Jeff Chandler, who took over in July, called the process “the best path forward” to simplify the business. A sale means the company is looking for a buyer, and it has described exactly what kind…