(Oct. 23, 2020) Facing both tax debt and unpaid wage claims, Crabcake Factory owner Johnny Brooks, CEO and sole shareholder of Satellite Restaurants, filed for bankruptcy on Oct. 14.
Brooks, who operates the Crabcake Factory location on 120th Street, filed for Chapter 11 bankruptcy relief under subchapter 5. The court filing does not include two other independently owned Crabcake Factory locations in Ocean City and Delaware.
In a signed statement dated Oct. 14, Brooks said the mandated disclosure of the business’s most recent balance statement, operating and cash flow statements, as well as federal tax returns, would not be finalized for several weeks.
Topping the list of debts is more than $193,000 owed to the IRS for the tax period ending on Sept. 30, 2009. The debt burden also includes roughly $16,000 in past legal fees and $6,800 for a state tax lien.
Brooks’ filing also disputes a wage and hour suit filed by a group of employees for unpaid labor.
The court documents state Brooks has less than 50 creditors, assets of less than $100,000 and liabilities of up to $500,000.
Any challenges to Brooks’ self-designation as a “small business debtor” must be filed with the court and served on the party in question by Nov. 27.
Under Chapter 11 procedures, Brooks is also required to file a debtor report by Nov. 27, which includes an outline of efforts to both formulate a Chapter 11 plan of reorganization and to communicate with creditors.