BLT Steak files for bankruptcy after failing to repay PPP loans
BLT Restaurant Group — the parent company of New York-based BLT Steak and BLT Prime — filed for bankruptcy in New York’s Southern District Court on Monday after 40% of the company’s Paycheck Protection Program loan ($1.3 million out of $3.3 million) has not been forgiven by the federal government.
According to bankruptcy documents, after initially receiving the PPP loan in April 2020, BLT Restaurant Group was unable to “restart and commit” multiple locations due to pandemic-related capacity restrictions and has not was unable to convince many employees to return to work in order to comply with the terms of the PPP loan, which led to the federal government’s rejection of a 100% loan forgiveness. In 2020, BLT Restaurant Group suffered a loss of revenue of $7.6 million.
“The company applied for and received PPP funds as soon as possible, as it was unclear how much would be available or for how long,” the bankruptcy filing said. “At the time the funds were requested, no one knew the economic disruption would last this long, and if this had been known, the company would have delayed requesting the funds until a later date so that all funds could be spent during the covered period.”
On top of that, BLT Restaurant Group says the company applied for the Restaurant Revitalization Fund program within five hours of the program opening to independent restaurants, and although it is eligible up to 7.1 million, it was eventually locked out after the company had to resubmit financial information in its application.
By filing for Chapter 11 bankruptcy, BLT Restaurant Group hopes the company will be able to “restructure existing debt” over the past two-plus years of the pandemic, including 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 to operate at a loss in the hope that bills introduced in Congress would allow the debtor to extend the period covered for its first loan and/or provide additional funding to the Restaurant Revitalization Fund,” indicates the bankruptcy record. “With the passage of the recent budget bill, these hopes are no longer reasonable and the debtor has no choice but to file for bankruptcy.”
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