Garces Group Declares Bankruptcy; Restaurants Will Stay Open for Now
The Iron Chef’s empire will restructure as part of a $5 million partnership with Louisiana-based Ballard Brands.
The end of chef Jose Garces’s troubles is a Chapter 11 bankruptcy restructuring — and a new beginning.
Garces, the chef-restaurateur behind Amada, Village Whiskey and more, announced on Wednesday afternoon a new partnership with Ballard Brands, a restaurant company in Covington, La., for $5 million dollars in cash and assumed liabilities.
Garces has been battered in recent months by various lawsuits, including two by investors, and he sounded audibly relieved during a phone interview. “We’re really excited about our partnership with Ballard, and about the future with them because we have a lot of synergies,” Garces said, “and we took a lot of time, building this relationship, and we’re a great match.”
The match might not look so obvious at first. Ballard specializes in fast casual concepts and the coffee chain, P.J.’s Coffee, while Garces made his name as a high-end chef. But Garces sees the partnership as one where each side gets to add to the other: “They have an expertise on the fast-casual side of things” — a space Garces entered with his taco shop Buena Onda — “and we have an expertise we bring on the hospitality and management side.”
Garces says that the plan “doesn’t currently involve” closings of any of his existing restaurants, and that he looks forward to establishing a larger footprint for Garces restaurants in the Southeast, where Ballard has focused, and beyond while “they help us get uprighted here.”
“Anytime you have an opportunity to work with a chef of Jose’s caliber, you jump at it,” said Scott Ballard, principal of Ballard Brands, in a press release. “We couldn’t be more excited to combine our organizations and leverage Chef’s skills to expand our operations beyond the Southeast and Mid-Atlantic markets our two groups currently serve.”
Garces’s restaurants have been besieged since the closing of Revel Casino in Atlantic City in June 2014. Garces says the four restaurants he operated in that location provided a big portion of his group’s profits, and the loss strained the whole company. A second blow befell the group when his New York version of Amada, which closed this year, ran into big construction overruns and never took off.
Garces started looking for a new partner in summer 2017 to keep the company afloat, and the deal with Ballard emerged from that process. The restructuring with Ballard necessitated that the Garces Group file for Chapter 11 bankruptcy protection in Camden.
Garces declined to talk about any negotiations he’d undertaken with his investors, but in recent months multiple sources close to the dispute said that the two sides had been talking for months with no deal to show for it. The restructuring means the final accounting will be made in court.
“With today’s filing, we are able to chart a new course for our future by stabilizing our financials while we continue our commitment to provide high-quality culinary and hospitality to our guests,” said Garces in the press release. “The last couple of years have been challenging, there is no doubt. This step allows us to build on our solid reputation and performance to bring new concepts to life with a fresh start. To our employees, our patrons and so many of our partners – we want you to know that we are open for business and thank you for sticking with us.”
At the end of the phone interview he stated, “From a customer’s perspective, and from the perspective of my employees, which means a lot to me, what this means is ‘no change.’ We’re open for business.”