Orlando-based Hawkers filing for bankruptcy but keeping restaurants open

Orlando-based restaurant Hawkers announced this week it will file for Chapter 11 bankruptcy to protect itself from what the company called a “hyper-aggressive” lender. Hawkers, which serves Asian street food, operates 15 restaurants in seven states — including one in St. Petersburg — and said all locations will remain open and continue normal operations during bankruptcy proceedings. The company entered into a “debt capital agreement” in early 2023, borrowing $23 million to grow the company nationally. Hawkers was started by four friends who opened the first Hawkers on Mills Avenue in Orlando in 2011.

Scott Shuker, the restaurant’s bankruptcy attorney, said Hawkers has never missed a loan payment. But in the last 60 days, he said, the lending company revealed its intentions to take over the restaurant by replacing its leadership. The lender is ABC Funding LLC, acting as an administrative agent for Summit Partners Subordinated Debt Fund IV, based out of Boston, Shuker said. The lending company could not be reached for comment. Filing for bankruptcy will give the company protections from that 2023 agreement and the lender’s threats, Shuker said.

“If you’re not in bankruptcy, once a lender declares the default and says pay us in full, in this case $20 million, you have no defense,” he said. “Bankruptcy allows you, hopefully by negotiation but otherwise by force, to impose new loan terms on the lender,” he added. “We received communication recently that made it clear that this lender, who we think is hyper-aggressive, intended to take over the company and put their own person in charge of running it, which we thought was a mistake,” Shuker said. “Because this lender had certain abilities to do that very quickly, to remove ownership, we felt that we had to be proactive and guard against that to protect employees, creditors and the business. ” Hawkers has been successful recently, with sales growth up 18.

5% companywide and same-store sales growth up 26% in 2023, according to the restaurant. “This filing will allow Hawkers to continue normal, uninterrupted operations and vendor payments while company control is re-stabilized in a way that secures a thriving and successful future for Hawkers and its dedicated team,” the company said in a statement Monday. Shuker called the situation “unique” and said he hoped negotiations would lead to a new agreement with the lending company. “Leadership is disappointed that they were forced to go this route, but they’re still very optimistic about the future of the company,” he said. “This is all I’ve done for 31 years and I’ve never filed a case before where my client had not missed a payment.