Crazy Mocha files for bankruptcy, cites pandemic
Crazy Mocha, with 23 coffee shop locations around Allegheny and Beaver counties, filed for Chapter 11 bankruptcy this week.
The filing cites the covid-19 pandemic as the need for a reorganization of the company. In addition to Crazy Mocha, the company also operates Kiva Han Coffee, a roaster and wholesaler.
“[T]he debtor was initially forced to close its operations for a period of months,” the filing said.
Since businesses began to reopen, the filing noted that the company has been able to open seven Crazy Mocha locations and maintain some of its Kiva Han operations.
“Despite the slow reopening of businesses, the financial strain caused by the shut-down of operations, including significant loss of revenue, and the slow recovery ahead, lead the debtor to seek protection and reorganization under the United State Bankruptcy Code,” the filing said.
The company, operating under Ed’s Beans, based in Cranberry, Butler County, said it had between 50 and 99 creditors.
On an attached balance sheet dated Dec. 31, 2019, the company’s total assets were listed at just over $5 million, and liabilities at $4.4 million.
The 20 largest unsecured creditors include owing more than $3 million to First Commonwealth Bank, which is owed more than $3 million. There is also unpaid rent of more than $200,000 for six locations, including in Brentwood, Southpointe Town Center and in the North Hills.
The company also lists $38,901 in “trade debt” to Beaver County’s Oram’s Donut Shop.
Included in the bankruptcy case, the owners are seeking permission to use cash flow from current operations to cover operating expenses and employee wages, which average about $55,000 per month.
The company employs 26 people, including 12 who work part-time and 14, who work full-time.
“A shortage of employees at this critical time would severely damage the debtor’s ability to meet the needs of customers and maintain the current level of business as well as to meet the necessary safety requirements in place on account of the covid-19 pandemic, therefore jeopardizing the entire reorganization of the debtor,” the motion said.
An emergency hearing on those issues is scheduled for Thursday.
The company’s attorney could not be reached for comment.
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.
Remove the ads from your TribLIVE reading experience but still support the journalists who create the content with TribLIVE Ad-Free.