Joel R. Glucksman
Partner
201-896-7095 jglucksman@sh-law.comFirm Insights
Dropping Fast Food Trend Sends Cosi into Bankruptcy
Author: Joel R. Glucksman
Date: October 6, 2016
Key Contacts
Back
Cosi Inc. recently announced that it had filed for Chapter 11 bankruptcy protection, according to Reuters. The upscale fast food chain cited substantial losses in recent years, which prompted the company to pursue a sale of its remaining assets.
Cosi ends up insolvent after struggles
In its bankruptcy documents, the chain claimed that consumer traffic to its fast food locations had fallen significantly in recent years because it failed to adjust to market trends. According to USA Today, following this steep decline, the company had removed its CEO and closed 29 of its 74 chain locations across the country with over 450 workers laid off. The company also listed $15.7 million in net losses on revenues of $88.9 million last year, with another $3.1 million lost this year on $22.3 million in sales through the second quarter.
In turn, its stock collapsed over 63 percent this year, including a recent 1.3 percent drop in recent days. The USA Today reported that as a result, the company listed $31.2 million in assets with $20 million in liabilities.
The reorganization plan for Cosi Inc
Cosi stated in its court papers that it negotiated a sale agreement with its lenders AB Opportunity Fund LLC, AB Value Partners LP and Milfam II L.P. to serve as the stalking horse bidder in its asset auction. Forbes reported that these lenders will set the lowest bids on all of Cosi’s assets. However, the deal is still in question due to a conflict with debtors regarding a collateral deal. In addition, as part of this deal, these creditors will provide $4 million in debtor-in-possession financing to keep the company’s core business and its franchise locations open.
Meanwhile, the plan is to use this funding to provide liquidity to maintain operations during the bankruptcy process.
Are you a creditor in a bankruptcy? Have you been sued by a bankrupt? If you have any questions about your rights, please contact me, Joel Glucksman, at 201-806-3364.
No Aspect of the advertisement has been approved by the Supreme Court. Results may vary depending on your particular facts and legal circumstances.
Related Posts
See all
SPACs Are Back, What You Need to Know
Special purpose acquisition companies (better known as SPACs) appear to be making a comeback. SPAC offerings for 2025 have already nearly surpassed last year’s totals, with additional transactions in the pipeline. SPACs last experienced a boom between 2020–2021, with approximately 600 U.S. companies raising a record $163 billion in 2021. Notable companies that went public […]
Author: Dan Brecher
Short Form Merger: Streamlining the Process for Businesses
Merging two companies is a complex legal and business transaction. A short form merger, in which an acquiring company merges with a subsidiary corporation, offers a more streamlined process that involves important corporate governance considerations. A short form merger, in which an acquiring company merges with a subsidiary corporation, offers a more streamlined process. However, […]
Author: Dan Brecher
Tariff Response Options for Small Businesses Facing Financial Distress
The Trump Administration’s new tariffs are having an oversized impact on small businesses, which already tend to operate on razor thin margins. Many businesses have been forced to raise prices, find new suppliers, lay off staff, and delay growth plans. For businesses facing even more dire financial circumstances, there are additional tariff response options, including […]
Author: Brian D. Spector
Common Causes of Partnership Disputes and How to Resolve Them
Business partnerships, much like marriages, function exceptionally well when partners are aligned but can become challenging when disagreements arise. Partnership disputes often stem from conflicts over business strategy, financial management, and unclear role definitions among partners. Understanding Business Partnership Conflicts Partnership conflicts place significant stress on businesses, making proactive measures essential. Partnerships should establish detailed […]
Author: Christopher D. Warren
Businesses Are Facing Financial Headwinds—A Practical Guide
*** The original article was featured on Bloomberg Tax, April 28, 2025 — As a tax attorney who spends much of my time helping people and companies who have large, unresolved issues with the IRS or one or more state tax departments, it often occurs to me that the best service that I can provide […]
Author: Scott H. Novak
President Trump's Termination of Member Gwynne Wilcox
On January 28, 2025, the Trump Administration terminated Gwynne Wilcox from her position as a Member of the National Labor Relations Board (NLRB or the Board). Gwynne Wilcox, a union side lawyer for Levy Ratner, was confirmed to the Board for an original term in 2021 and confirmed again for a successive five-year term expiring […]
Author: Matthew F. Mimnaugh
No Aspect of the advertisement has been approved by the Supreme Court. Results may vary depending on your particular facts and legal circumstances.
Sign up to get the latest from our attorneys!
Explore What Matters Most to You.
Consider subscribing to our Firm Insights mailing list by clicking the button below so you can keep up to date with the firm`s latest articles covering various legal topics.
Stay informed and inspired with the latest updates, insights, and events from Scarinci Hollenbeck. Our resource library provides valuable content across a range of categories to keep you connected and ahead of the curve.