Startup restaurants can be hard to get off the ground. While the concept may seem like something that can work, legalities and other costs can get in the way.
This appears to be what happened for the Philippe Chow restaurants. There are four locations, with one in Boca Raton and another in Miami. Two others are in New York. The Boca Raton location recently filed for Chapter 7 bankruptcy. In the corresponding bankruptcy documents, aside from the Boca Raton location, two others have also closed.
According to the Chapter 7 bankruptcy filing, the Philippe Chow Boca Raton location has $1.19 million in liabilities and just $47,955 in assets.
A list of creditors is also included in the filing, including:
- Chung Hing Food Market is owed $85,000.
- The Gab Group, which is located in Boca Raton, is owed $16,188.
- The Florida Department of Revenue is listed at being owed $55,474.
In looking at this startup restaurant, last year the Philippe Chow restaurants ran into some legal troubles when restaurateur Michael Chow sued and won $1 million. This was after the restaurant’s chef had changed his name from Chak Yam Chau to Philippe Chow Chau.
Looking to the future, unlike a Chapter 11 bankruptcy where a business reorganizes, a Chapter 7 bankruptcy is a liquidation bankruptcy. This is when assets are sold off and many creditors usually only recoup a little or nothing of what is owed to them.
For the business, this bankruptcy filing will most likely give Philippe Chow restaurants the ability to wipe the slate clean and no longer have to deal with creditors. Of course this is probably not want the entrepreneur who started the restaurant chains imagined, but it is a viable solution to the business’ debt issues.
Source: South Florida Business Journal, “Philippe Chow Boca files Chapter 7 bankruptcy,” Paul Brinkmann, Feb. 26, 2013