SALT LAKE CITY — A popular Utah sandwich restaurant chain has declared chapter 11 bankruptcy after an executive said it "expanded too quickly."
Even Stevens, which had a combined 15 stores in Utah, Arizona, Idaho, Colorado, Texas and Washington, has already shuttered five of its locations "in order to right-size the company and put it on track to achieve enterprise-level profits," Brooks Pickering, chief restructuring officer for the company, said in a news release Thursday.
According to bankruptcy documents filed in U.S. Bankruptcy Court for the District of Arizona, Even Stevens owes between $1 million and $10 million combined to dozens of creditors. The restaurant currently has between zero and $50,000 in assets, the document states.
Among Utah businesses to which the chain is most in debt, Even Stevens owes West Jordan-based Sysco Intermountain $380,000, Salt Lake City-based Standard Restaurant Supply more than $100,000 and Orem-based Strategic Technology $44,000, according to the document. It also owes more than $4.5 million in inter-company loans.
As part of its restructuring, the company is closing its Provo location, as well as locations in Arizona, Texas and Colorado. All employees at the Provo location have been offered jobs at other Utah locations, the release states.
The decision to file bankruptcy came after "seven months of business restructuring," according to the company. The chapter 11 bankruptcy filing "allows the company to conduct business during the restructuring process."
"Today’s action is an important step on our path to financial stability," Pickering said. "As a start-up, Even Stevens came out of the gate with positive momentum but expanded too quickly, saddling the company with significant financial and operational challenges.
"While the restructuring to date has significantly improved operations, the remaining challenges require the tools afforded through the bankruptcy process to properly protect the interests of our investors, financiers, employees and customers. With the proper business organization and financial discipline, we look forward to achieving long-term success."
The sandwich company that started in 2014 claims it donates a sandwich to a local non-profit for every sandwich sold.
Pickering said decisions made by former management "have put us in a difficult position" but that current leadership is focused on improving food security in communities where the restaurant operates.
In May 2018, co-founder Steve Downs agreed to pay a $150,000 fine to resolve allegations that he misrepresented the financial success of event centers he owns in Utah and four other states. The move came after the Securities and Exchange Commission filed a complaint against him in federal court.
The SEC alleged Down, of Draper, misled potential investors about the profitability of eight events centers, which can be rented for weddings and parties, in five states, including two in Utah — one at Trolley Square in Salt Lake City and the other in St. George. The company’s own financial records show the company never made money, according to the complaint.
Even Stevens then distanced itself from Down in a statement, saying he is a founder and one of many investors but has no role in the day-to-day management or operations of the company.