Razzoo’s, Inc., the parent company of the well-known Razzoo’s Cajun Cafe chain, filed for Chapter 11 bankruptcy on October 1, 2023, in the U.S. Bankruptcy Court for the Southern District of Texas. This action aims to facilitate a restructuring of its debt while allowing its restaurants to continue operating during the legal proceedings.
Founded in 1991, Razzoo’s Cajun Cafe has served Louisiana-inspired cuisine at over 20 locations in Texas and North Carolina. According to PacerMonitor, the bankruptcy filing pertains only to the parent company, not the individual restaurant locations. The company is targeting financial stabilization amid pressures such as declining sales that have persisted since the pandemic, alongside intensified competition from rival casual dining establishments.
The financial situation at Razzoo’s is significant, with assets and liabilities estimated between $10,000,001 and $50 million. The chain has reported having between 1,000 and 5,000 unsecured creditors, indicating a complex financial landscape.
Details of the Bankruptcy Filing
Razzoo’s filed its petition in Houston, Texas, and categorized its case as “complex” due to the large number of creditors involved. The company paid a filing fee of $1,738 and was assigned case number 4:25-bk-90522. During the initial proceedings, Razzoo’s requested court approval for several crucial operations, including the hiring of Donlin, Recano & Co. to manage claims and oversee the voting process.
Furthermore, the company sought permission to jointly administer its bankruptcy case with affiliated entities, aiming to streamline the process. A hearing for these requests was scheduled for October 3, 2023, at 08:30 a.m. via teleconference.
On the same day, the court signed orders approving several emergency motions. These included provisions allowing Razzoo’s to continue day-to-day operations, maintain its banking and cash management systems, and ensure that employees receive their wages. The court also granted the company additional time to file detailed schedules of assets and liabilities.
Challenges Ahead for Razzoo’s Cajun Cafe
Despite the court’s approval of many motions, the ruling on Razzoo’s request for debtor-in-possession (DIP) financing was postponed until October 7, 2023. This financing is vital for the company, as it would provide necessary funds to sustain operations during the restructuring process. On October 2, lender First Horizon Bank formally objected to the proposed DIP financing, highlighting the ongoing negotiations surrounding the terms.
The initial hearing on October 3 lasted about an hour and resulted in approval for essential motions, including the continuation of employee payments and operational expenses. However, the unresolved DIP financing remains a critical point for Razzoo’s as it prepares for its upcoming reorganization plan.
Moving forward, Razzoo’s must submit a comprehensive plan detailing how it intends to restructure its debt, repay creditors, and maintain operations. The road ahead will require careful navigation of financial obligations and market challenges, but the company remains committed to its legacy of serving Cajun cuisine over its 30-plus years in business.
