Although it is listed as one of best burger restaurants in east bayPopular vegan restaurant Malibu’s Burgers filed for Chapter 11 bankruptcy last week, saying it fell prey to a ‘bad loan’ from Credibly, the The San Francisco Business Times reported.
The company, which lends to small and medium-sized businesses, allegedly siphoned a “daily installment amount” of $577 from founder and co-owner Darren Preston’s bank account and says they owe $114,325 in future debt, Eater San Francisco reported. A hearing is now scheduled for March 29.
According to last week’s court filing, Malibu brought in $1.14 million in revenue in 2021 and $257,000 in 2020, but owners only had $5,000 in assets and more than $250,000 in liabilities. The Business Times reported that Preston believed he took out an $85,000 loan from Credibly last year, but had in fact signed up for a debt purchase agreement instead – a contract that allows lenders to receive advance payment from customers. Preston told Eater that the bankruptcy filing will not affect their day-to-day operations and that they will still serve their impossible burgers in the meantime.
Many Bay Area restaurants are struggling to survive during the pandemic. At least 120 restaurants closed throughout 2021, and the list of restaurant closures during the pandemic keep growing. Ruthless rents, soaring food inflation and staff shortage are just a few factors that are compromising the Bay Area’s culinary landscape.
Preston has not responded to SFGATE’s request for comment at the time of this writing.
Susana Guerrero, food reporter for SFGATE, contributed to this report.
