Toronto hospitality company, King Street Restaurant Group (KSF Group), has recently filed for creditor protection after owing more than $34 million to creditors.
What is collectively referred to as the KSF Group — behind Toronto names such as La Banane, CXBO, Buca, Bar Buca, Jacobs & Co. Steakhouse, and Jamie’s Italian — filed for insolvency on Friday.
The Companies’ Creditors Arrangement Act application dated November 6, confirms that loss of business, caused by the pandemic, led to KSF Group’s revenue falling 95% below what was projected.
Due to the lockdown, they have also seen a 98% decrease from the previous year during this time.
According to the court document, the group’s “expansion and built-out costs” prior to the pandemic, in addition to unplanned losses at JI Yorkdale and JI Square One also place a significant strain on the KSF Group’s “working capital and liquidity.”
Despite the cash conservation measures that the King Street Restaurant group implemented, the pandemic has had an “irreversible negative impact” on their ability to operate its businesses.
“Alongside the entire hospitality sector, the Covid-19 Pandemic has put us in an extremely difficult situation that was beyond our control” said Peter Tsebelis, Managing Director and Partner of King Street Company Inc., in a press release.
“We are grateful to our loyal clientele, our tireless staff, our supportive financing partners, and all of our stakeholders that have helped us through these very challenging circumstances.”
According to the court documents, as of November 6, the KSF group currently owes their lenders about $34,943,688.
With the CCAA proceedings, the KSF Group intends to continue operating it’s takeout and delivery businesses during the remainder of the pandemic.
“This was an emotional decision for us but we are confident that the CCAA process will give us time to stabilize our business and ultimately put us in a stronger position to build on our successful brands as we emerge from the COVID crisis,” said Tsebelis.