BLT Restaurant Group — the parent company of New York City-based BLT Steak and BLT Prime — filed for bankruptcy with the New York Southern District Court on Monday, after 40% of the company’s Paycheck Protection Program loan ($1.3 million of $3.3 million) was not forgiven by the federal government.
According to the bankruptcy documents, after initially receiving the PPP loan in April 2020, BLT Restaurant Group was unable to “restart and engage” multiple locations due to pandemic-related capacity restrictions and was unable to convince many employees to return to work in order to comply with the terms of the PPP loan, resulting in the federal government’s rejection of 100% loan forgiveness. During 2020, BLT Restaurant Group suffered a $7.6 million loss of income.
“The company applied for and received PPP funds at the earliest opportunity because it was not known how much would be available or for how long,” the bankruptcy filing says. “At the time the funds were applied for, no one knew the economic disruption would last so long, and had that been known, the company would have delays applying for the funds until a later date so all funds could be expended during the covered period.”
On top of this, BLT Restaurant Group says that the company applied for the Restaurant Revitalization Fund program within five hours of the program opening up to independent restaurants, and despite being eligible for up to $7.1 million, was ultimately locked out after the company had to resubmit financial information in its application.
By filing for Chapter 11 bankruptcy, BLT Restaurant Group hopes that the company will be able to “restructure existing debt” over the last two-plus years of the pandemic, including the PPP loans.
Ultimately, BLT Restaurant Group made its decision to file for bankruptcy after it was clear that a second round of the Restaurant Revitalization Fund was not making its way into the Congressional budget.
“The company continued its operations at a loss based on a hope that bills introduced in Congress would allow the debtor to extend the covered period for its first loan and/or grant additional funding for the Restaurant Revitalization Fund,” the bankruptcy filing states. “With the passage of the recent budget bill, those hopes are no longer reasonable and debtor has no other option than to file for bankruptcy.”
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