Texas-based Razzoo’s, Inc., the parent company of the popular Razzoo’s Cajun Cafe chain, filed for Chapter 11 bankruptcy on October 1 in the U.S. Bankruptcy Court for the Southern District of Texas (Houston Division). The move comes as the company works to restructure debt while keeping its restaurants open during the proceedings.
Razzoo’s Cajun Cafe’s Parent Company Files for Bankruptcy Protection
Founded in 1991, Razzoo’s Cajun Cafe has been serving Louisiana-inspired flavors across more than 20 locations in Texas and North Carolina. According to PacerMonitor, the chain itself did not file for bankruptcy, the parent company’s filing covers its operations and aims to stabilize the business amid ongoing financial pressures, including post-pandemic sales declines and rising competition from other casual dining chains.
The brand has between $10,000,001 and $50 million in assets and liabilities. The chain has between 1,000 and 5,000 unsecured creditors.
For 30+ years, the Cajun chain has been serving Louisiana flavors across its 20 locations in Texas and North Carolina. However, Razzoo’s Cajun Cafe has faced declining sales since the pandemic began.
Competition from discounted offers at rival casual dining chains, along with rising inflation, contributed to its financial struggles and eventual bankruptcy filing.
An Overview of the Proceedings So Far
The Cajun-style dining chain petitioned in the U.S. Bankruptcy Court for the Southern District of Texas in Houston on October 1. With a request for a restructuring process, Razzoo’s made the voluntary filing by paying a non-individual fee amount of $1738. The court designated case number ‘4:25-bk-90522’ as ‘complex’ based on the large number of creditors, vendors, and leases.
Razzoo’s then filed an emergency motion requesting the court to approve the hiring of Donlin, Recano & Co. to handle managing claims, overseeing voting, and sending notices. Other parties had 21 days to object to the Cajun chain’s request.
The Texas-based chain also requested permission to jointly administer its case alongside affiliated companies, streamlining the proceedings. A hearing for the requests was then scheduled for October 3 at 8:30 a.m. via teleconference.
The U.S. Bankruptcy Court for the Southern District of Texas in Houston signed the orders for the above-mentioned requests on October 1. Following this, Razzoo’s sought the bankruptcy court to allow it to file one combined list for its 30 largest unsecured creditors. The court scheduled the hearing for the new request on October 3 at 8:30 a.m. via teleconference.
Additionally, the Cajun chain requested more time to file the schedules of assets and liabilities along with other financial documents. A hearing for the same was scheduled at 8:30 a.m. at Houston, Courtroom 400 (ARP).
Among its emergency motions, Razzoo’s sought approval to keep operating day-to-day, including maintaining its bank accounts and cash management systems. The Texas-based chain sought permission to pay due employee wages and vendors, stop utilities from getting shut off, and more. Razzoo’s also wanted approval for DIP financing, which could help it continue operations.
On October 2, lender First Horizon Bank formally objected to the proposed debtor-in-possession (DIP) financing, a temporary bankruptcy loan meant to fund operations. Additionally, Razzoo’s and its creditors submitted their supporting evidence, exhibits, and witness lists for the upcoming hearings on the same day.
The first hearing lasted for about an hour on October 3 in the U.S. Bankruptcy Court for the Southern District of Texas in Houston. Based on it, Razzoo’s Inc. received approval for many of its emergency motions, such as paying employees and vendors, keeping the utilities running, and using cash systems and bank accounts. The Cajun chain got an extended time for its financial schedules as well.
However, the bankruptcy court delayed its ruling relating to the DIP financing until October 7. With this, First Horizon and other creditors receive more time to argue over the financing terms.
Razzoo’s Cajun Cafe will now need to submit a reorganization plan in the coming months, outlining how it will restructure debt, repay creditors, and continue operating.
