UPDATED: Saxbys Coffee Worldwide LLC, the Conshohocken-based national franchise chain that wants to be a higher-class Starbucks, says its bankruptcy filing won't delay planned expansion of the 37-store chain into new sites in Philadelphia and beyond.
The company has asked Philadelphia-based U.S. bankruptcy court judge Eric Frank to give it more time to prepare its case, intially filed Aug. 5, for Chapter 11 reorganization. Frank initially said Saxbys had until Aug. 20 to list its creditors, assets and liabilities or he'd throw the case out of court. Saxbys wants the deadline pushed to Sept. 9.
The filing follows a string of lawsuits in Colorado, Illinois, Nevada and elsewhere by investors in Saxby's previous owner, Saxbys Coffees Inc. of Atlanta, who say they're owed money. Philadelphia lawyer Paul Winterhalter told me he filed the Chapter 11 petition "to get that under control and stop the bleeding." Winterthaler says that, in bankruptcy, complaintants "will have to come to Philadelphia. We expect it will be a rather straightforward bankruptcy. The franchise agreements will remain in effect."
Saxbys operates 14 stores in Pennsylvania, where it acquired remnants of the former Bucks County Coffee Co. last year, along with others in nine states across the country and the District of Columbia. Saxbys had announced plans to open another 10 in the Philadelphia area, and eight elsewhere.
"Our company has continued to grow by leaps and bounds," said president Nick Bayer. Bankruptcy "is going to allow us to open those shops a little more quickly and a little more efficiently. Our money had been diverted to these legal cases. (Bankruptcy) will help us open more quickly." Saxbys' secured lender is Bancorp Bank, the Philadelphia- and Wilmington-based company run by former Jefferson Bank boss Betsy Z. Cohen
We haven't heard back from one other principal, Philadelphia real estate investor Joseph Grasso, whose firm, Walnut Street Capital, acquired Saxbys and moved its headquarters to Philadelphia from Atlanta in 2007 after he developed the chain's Lansdale store. Case is PA e.d. 09-15898-elf in U.S. Bankruptcy Court, Eastern District of Pennsylvania.