Chef Mark McEwan's Resto Group Is In 'Crisis' & 2 Toronto Spots Are On The Chopping Block
The company has filed for creditor protection.
The company behind Food Network star and celebrity chef, Mark McEwan, is facing some financial struggles due to the COVID-19 pandemic. McEwan Enterprises Inc. (MEI) owns six high-profile restaurants in the city, like Bymark, Fabbrica, ONE and Diwan, as well as grocer McEwan Fine Foods.
MEI is dealing with a "liquidity crisis" that made the business insolvent (meaning that they can't commit to their financial obligations at the moment). In a 235-page court document called the McEwan Affidavit, the company filed for the Companies' Creditors Arrangement Act (CCAA) on September 28 for $11 million in outstanding liabilities as well as a cash balance of nearly $1 million.
Under the CCAA, MEI will get 30 days of protection from its creditors in order to give them time to restructure.
For a number of years, certain McEwan locations have been "underperforming," and according to the court filing, these locations are "causing an overall significant strain on the Company's profitability and liquidity." Fabbrica Don Mills and McEwan Fine Foods had been underperforming even before the COVID-19 pandemic started.
"More recently, following the opening of the McEwan Grocery Location at Yonge and Bloor in 2019, this location has created significant strain on the Company's liquidity," the court filing read. "With an extensive footprint and significant lease and operational costs, combined with disappointing sales results, McEwan Yonge & Bloor has had the most detrimental impact on the Company's overall financial performance."
As part of its recovery plan, MEI came into an agreement with Fairfax Financial Holdings Ltd. and the chef himself to rebuy the biz under a new company — 2864785 Ontario Corp. — which will keep on its staff of 268 employees as well as lower its lease obligations with fewer grocery and restaurant locations. This agreement won't cover "excluded locations," which are Fabbrica Don Mills and McEwan Yonge & Bloor.
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