Crack'd Egg in Brentwood files for bankruptcy
The Brentwood restaurant that made news last month for continuing to operate despite a health department order requiring it to close has filed for Chapter 11 bankruptcy.
The process will allow the Crack’d Egg to reorganize its debt while continuing to operate.
According to the voluntary petition filed Friday in U.S. Bankruptcy Court in Pittsburgh, the Crack’d Egg, owned by Kimberly Waigand, has just under $445,000 in unsecured debt.
Attorney Sy O. Lampl said that the Brownsville Road restaurant, which opened five years ago, has been struggling following the March shutdown orders by Gov. Tom Wolf in response to the covid-19 pandemic.
The Crack’d Egg has seen a significant decrease in revenue, Lampl said.
Even with restaurants allowed to operate at 50% capacity, he said, the Crack’d Egg’s location is very small.
“This was a necessary move to preserve the financial enterprise of the Crack’d Egg,” Lampl continued. “This is their lives. They’ve put everything into this.”
Of the money owed, $350,000 comes from a loan to the business made by Kimberly’s husband, Donald Waigand, Lampl said. That loan came from proceeds from a personal injury case, he said.
“They took their whole life savings and put it into this. They wanted to reinvest in their community.”
Typically, Lampl said, a Chapter 11 case concludes within a year. The restaurant’s reorganization plan is due on April 7.
The Crack’d Egg was ordered by the Allegheny County Health Department to close on Aug. 11 after inspectors found that the restaurant was failing to follow state orders to require employees and patrons to wear masks inside and for failing to adhere to occupancy limits and enforce social distancing.
However, the restaurant continued to operate — and Kimberly Waigand spoke at a Harrisburg rally in which she encouraged others to do the same.
On Sept. 16, the health department filed a complaint and emergency motion for a preliminary injunction against the restaurant in state court.
A week later, the Crack’d Egg filed a federal lawsuit against Allegheny County and the health department alleging civil rights violations and claiming that the orders forcing it to close were illegal.
All of those matters will now be automatically stayed pending the bankruptcy case, Lampl said, and the restaurant continues to operate.
Paula Reed Ward is a TribLive reporter covering federal and Allegheny County courts. She joined the Trib in 2020 after spending nearly 17 years at the Pittsburgh Post-Gazette, where she was part of a Pulitzer Prize-winning team. She is the author of “Death by Cyanide.” She can be reached at pward@triblive.com.
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