AKRON, Ohio — Melt Bar & Grilled, a homegrown restaurant chain built on oversized grilled cheese sandwiches, has filed bankruptcy in hopes of slashing its debt.
The company is seeking Chapter 11 bankruptcy protection. That’s a reorganization that would allow Melt to keep operating – as a slimmed-down business.
The bankruptcy petition, filed Friday, says Melt is losing money and struggling to pay bills from landlords, vendors and service providers. The once fast-growing company has 91 employees and only four restaurants left in Akron, Lakewood, Mentor and Columbus.
Restructuring through bankruptcy is a move designed “to ensure (the company's) immediate survival and long-term future success,” according to documents filed with the U.S. Bankruptcy Court in Akron.
News 5 reached out to Melt’s attorney for comment but has not heard back yet.
The bankruptcy filing says Melt has more than 100 creditors and estimated liabilities of just over $1 million to $10 million. But the company has only $500,001 to $1 million in assets.
Court documents tell the story of aggressive growth cut short by the pandemic.
Melt founder Matt Fish opened his first restaurant in Lakewood in 2006. The hulking sandwiches, fries and slaw quickly gained a devoted following. National TV hosts traveled to Northeast Ohio to conquer the 5-pound Melt Challenge, stuffed with 13 kinds of cheese.
The business expanded to Cleveland Heights in 2010 and then went on a growth binge. By 2017, Melt had 13 locations – some company-operated, some through licensing deals – and more than 350 employees.
Then the pandemic hit, forcing restaurants to shut their doors and shift to take-out and delivery for months.
Melt never recovered.
“The increased cost of goods and labor and major shifts and changes in the service industry have hurt (Melt’s) operations tremendously,” an attorney for the company wrote in one of the bankruptcy court filings.
Melt is asking the court’s permission to use its limited cash to pay workers and keep the business going. It's unclear whether any of the remaining restaurants will close.
Court records show Melt owes $1.8 million on loans from Huntington Bank. The list of debts also shows $1.7 million in rent. Some of those rent payments are the subjects of litigation between Melt and its former landlords.
A bankruptcy court judge has scheduled an initial hearing on the case for Thursday morning.
