Olga’s Kitchen, a Southeast Michigan Mediterranean restaurant chain, filed for Chapter 11 bankruptcy protection on June 11, 2015 in a U.S. Bankruptcy Court in Detroit. The restaurant is known for its signature gyro sandwich and “Olga” bread.
The company has been in business since 1970, but has been struggling with eight under-performing locations over the past year, according to a Detroit Free Press article by Brent Snavely and Frank Witsil. The eight locations were located in regional malls, and are now closed.
The company has 28 remaining restaurants which will remain open.
The company’s bankruptcy petition lists millions of dollars owed to various creditors. Olga’s Kitchen reportedly owes $2.4 million to Citizens Bank, $1.2 million to food supplier Sysco Corp., $356,342 to Art Financial/Washington Business Bank and $103,843 to law firm Dickinson Wright PLLC.
Both assets and liabilities were listed between $1 million to $10 million in the bankruptcy petition.
Despite the company’s Chapter 11 bankruptcy filing, company chief operating officer Michael Kosloski has a hopeful outlook on the company’s future.
Kosloski said, “The future is bright for Olga’s Kitchen. The 28 restaurants are now profitable and growing in profitably.”
Kosloski claims it was the owner’s decision to file Chapter 11 bankruptcy, since the company struggled with accumulated debt.
Another problem for the company came when they opened a downtown Detroit location in the Compuware Building in 2012. A Crain’s Detroit article by Dustin Walsh and Kirk Pinho claimed the Compuware location contributed to insurmountable debt.
Olga’s Kitchen plans to bounce back through a fast-casual concept, updating its look and adding new recipes.