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Why Saxbys filed for bankruptcy

Investors and store owners from an earlier period of Saxbys Coffee are suing the Philadelphia chain's current ownership

A Philadelphia federal bankruptcy court filing by lawyers for Saxbys Worldwide Coffee LLC sheds new light on why the Philadelphia-based national chain filed for bankruptcy protection last month while still opening new stores.

According to the "Pending Litigation" schedule, Saxbys faces a total of 18 lawsuits from former franchisees and investors in California, Colorado, Illinois, Indiana, New Jersey, Pennsylvania, and Washington, DC, seeking a total of more than $1 million from the chain, plus defendants that include, in various lawsuits, previous and current owners and president Nick Bayer.

Saxbys, now 70% owned by Philadelphia developer Joseph Grasso and 30% by Saxbys officer Kevin Meakim, has earned a total of $2 million in its two-year history, court records show. Saxbys representatives have said the company filed to consolidate and reduce the cost of that litigation.

Case is E.Pa. (Bankruptcy) 09-15898