SOUTH PORTLAND — The owner of Ricetta’s Brick Oven Pizzeria said he expects the South Portland and Falmouth restaurants to emerge intact after seeking bankruptcy protection.
The company filed for Chapter 11 bankruptcy protection in February because it was unable to sufficiently repay debt accumulated for a new restaurant in Kennebunk, owner Ronald Stephan said. The filing, he said Wednesday, protected the South Portland and Falmouth restaurants from lawsuits by creditors of the Kennebunk business.
Stephan said that despite the bankruptcy filing, the company’s restaurants in South Portland and Falmouth are still strong and profitable. He said the failed Kennebunk location, which opened 11 months ago but was closed and liquidated in February, was the result of a perfect storm, including increasing food and operating costs and declining off-season demand.
“We couldn’t have picked a worse time to expand,” Stephan said. “A lot of things spiraled out of control. Combine that with an unprecedented economic downturn, and it puts small operators like ourselves in a pinch.”
According to documents filed at U.S. Bankruptcy Court in Portland, Ricetta’s claimed between $100,000 and $500,000 in assets. It said fewer than 100 creditors were owed a total of between $1 million and $10 million. Of that debt, the restaurant owed more than $996,000 to its 20 largest unsecured lenders, including $210,000 to TD Bank, $36,400 to Market Fresh Produce in Scarborough and $15,000 to Micucci Wholesale foods in Portland. Stephan had also loaned the business nearly $32,000.
Jeffrey Piampiano, an attorney for Ricetta’s, said the court is allowing the company to continue to operate its remaining business as usual. Although there is a court hearing scheduled for
July 14, Piampiano expects Ricetta’s will have a reorganization plan for a more streamlined business complete and signed by creditors within a month or two.
The goal, he said, is to return Ricetta’s operation to where it was before the Kennebunk expansion.
“There’s no doubt they’re going to do that,” Piampiano said. “They’re a good business and their customer base continues to be strong. We expect to move forward with a plan without any issues.”
Piampiano said Ricetta’s must maintain at least $42,350 in cash collateral – inventory, cash on hand and accounts receivable – to protect TD Bank’s interests. “There’s always been more than enough protection for the bank,” he said.
Ricetta’s opened at 29 Western Ave. in South Portland in June 1989 and at 240 Route 1 in Falmouth in August 2000.
Stephan, who started in 1989 as an employee, said the business is currently planning specials to celebrate the 20th anniversary of the South Portland restaurant, which makes about 250,000 pizzas a year and has served 1.5 million meals since 1989.
“We’re still stable and solid,” Stephan said. “We’re not going anywhere.”
Randy Billings can be reached at 781-3661 ext. 100 or firstname.lastname@example.org.