Philadelphia chef Jose Garces, a Food Network stalwart who built a brand with his Garces Group, has filed for Chapter 11 bankruptcy and will sell his restaurant group to the Louisiana-based Ballard Brands. The Garces Group — which includes restaurants like Amada, Tinto, and Volver in Philadelphia and Ortzi in New York City — was sold for $5 million.
It’s an inauspicious end for the chef who once ran more than two dozen restaurants from Scottsdale, Arizona to Chicago to Palm Springs. At the time of today’s sale, the Garces Group had 13 restaurants in its portfolio. Ballard Brands, its new parent company, includes concepts like WOW Café American Grill & Wingery, PJ’s Coffee, and the Original City Diner in its portfolio; the latter is most famous for its pancake that fits inside a pizza box.
The unraveling of the Garces Group has been fought in the courts — and press — since last year. According to reports, in 2017, M&T Bank, which holds a multimillion-dollar loan in the group, asked Garces to install a financial adviser to help turn things around. In mid-April, investor Jim Sorkin filed suit against Garces and seven of his restaurants, alleging more than $800,000 in unpaid invoices for food; it was just the latest in a string of lawsuits that Philadelphia reports totaled $5 million as of April. (One lawsuit compared the Garces Group to a Ponzi scheme.) By late April, creditors leaked that a bankruptcy filing was likely.
And just yesterday, investors in three of his Philadelphia restaurants filed suit to remove the chef-owner from managerial control, alleging Garces mismanaged the restaurants, arranged for $9 million in credit from a bank without their knowledge, and ignored a request earlier this year to step down.
In April, Garces acknowledged in a Philadelphia Inquirer story that his group was suffering “financial challenges” and said he was finalizing plans for a potential solve. In a press release obtained by the Inquirer today, Garces said that the sale “allows us to build on our solid reputation and performance to bring new concepts to life with a fresh start.”
Per the Inquirer, the deal is expected to close in 45 to 60 days; until then, it’ll be business as usual at all the restaurants.
• Garces announces sale of restaurant company, enters bankruptcy [Philly.com]
• Iron Chef Jose Garces Is Being Sued for Underpaying Multiple Vendors [E]
• Jose Garces in Crisis: The Trials of a Celebrity Chef [Philly Mag]