Philly-based award-winning chef Garces files for bankruptcy

The restaurateur is facing a smorgasbord of lawsuits.

Steve Tawa
May 02, 2018 - 4:17 pm
Jose Garces

Ceisler Media & Issue Advocacy

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PHILADELPHIA (KYW Newsradio) — Jose Garces, the award-winning celebrity chef, is taking the bankruptcy route on a path out of his financial mess.

The Philadelphia-based chef, who owns acclaimed restaurants nationwide, filed for Chapter 11 bankruptcy protection today in Camden, N.J., as a means to stabilize his existing restaurants.

"We're looking to take care of some debts to the best of our ability," he said, "and really, just start fresh and have a nice clean slate to work from."

Garces opened Amada, a Spanish tapas spot, in Old City in 2005 — something well-known local restaurant king Stephen Starr didn't think would take off.

He went on to become a James Beard award winner, TV Iron Chef and cookbook author.

Now, he wants to form an alliance with Ballard Brands, which offered to purchase the assets of Garces Group for more than $5 million in cash and assumed liabilities.

Garces is facing a smorgasbord of lawsuits on his plate, including from early investors and vendors who claim he misappropriated cash and assets while he built his restaurant empire, leaving them crumbs, such as unpaid bills and profits generated from them, as well as piles of debt by putting up restaurants as collateral.

Garces claimed much of it was bad luck, including the sudden closing of Revel Casino, which affected four of his restaurants in Atlantic City, and the financial losses with his failed Amada restaurant in New York City.

"Those events really impacted the company, and likewise, impacted our partnerships," he explained.

At the time, the Garces Group was generating $40 million a year. 

His restaurant empire at once totaled nearly 30 that he's opened or managed — in Manhattan, Washington, Chicago, Palm Springs, Scottsdale and Atlantic City — and now he's down to 13 restaurants, mostly in Philadelphia.

Ballard's portfolio of 150 locations includes WOW Cafe restaurants, PJ's Coffee, and other chain eateries. Garces says Ballard is known for taking successful concepts and scaling them. 

He said he intends to offer employment to most, if not all, of his 750 employees.