Toojay’s is a restaurant chain that operates 28 deli-themed restaurants, a commissary and bakery in the state of Florida. The company had been profitable and was seeking to expand its presence in the Southeast before the COVID-19 pandemic hit in March. Due to rules mandated by local government at the onset of the pandemic, the company was initially required to close most of its restaurants, resulting in a 75% reduction in staff. In order to maintain the going-concern value of the business, management obtained a loan from the Paycheck Protection Program and determined it was in the best interest of its constituents to file for protection under Chapter 11 of the Bankruptcy Code.

Shortly after filing its bankruptcy petition, the company retained Getzler Henrich (“GH”) to guide it through the bankruptcy process and provide assistance in reducing store-level operating costs. GH, through intensive negotiations with the company’s landlords, was able to obtain more than $1.3 million in abatements and deferrals, enabling the company to preserve cash and enhance store-level profitability, and setting it on a course for future success as the pandemic-related rules are gradually lifted. During the course of the bankruptcy GH worked with the management team to develop DIP budgets to support the use of cash collateral and to provide reporting as required by the senior lender and under the Bankruptcy Code. In addition, GH guided the management team in the preparation of long-term cash-flow forecasts to support the company’s parallel reorganization and sale process tracks.

Ultimately, GH guided the company to a successful sale to its senior lender under Section 363 of the Bankruptcy Code. Post-sale GH is managing and reconciling the sale escrow budget according to the asset purchase agreement and winding down the bankruptcy estate.