Coffee chain closes cafes, finds Chapter 11 bankruptcy lifeline

Losing a section java store changes the constitution of a community.

Coffee shops aren't conscionable a spot to devour and drink; they're a spot to stitchery with friends, a "third place" aft location and work. Longtime Starbucks CEO Howard Schultz ever advocated for this.

Fans of Compass Coffee, however, person seen their alleged 3rd spot disappear, arsenic the concatenation has steadily closed locations aft its January Chapter 11 bankruptcy filing.

That filing enactment the full institution astatine risk, with Compass filing for support to instantly terminate 10 leases, though it did stock hopes that suitors would beryllium funny successful those locations, according to documents connected PacerMonitor.

Now, Compass Coffee, which has closed 10 locations with 17 inactive operating arsenic portion of its bankruptcy process, whitethorn person a lifeline that could prevention the cafes, if not the brand.

When Compass Coffee filed for Chapter 11 bankruptcy, London-based java concatenation Caffè Nero submitted a "stalking horse" bid of $2.9 cardinal for the marque and its assets.

"The stalking equine bidder is the bidder who sets the level for different bidders to bid against. By establishing a baseline bid, the stalking equine bidder protects the debtor from a concern wherever it mightiness lone person unreasonably debased bids for its assets," the Troutman Pepper Locke instrumentality steadfast shared connected its website.

Caffè Nero yet was the winning bidder, but had to rise its terms to $4.75 million, Compass CEO Michael Haft told The Washington Post.

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The higher merchantability terms means determination were different bidders. The bankruptcy tribunal inactive needs to o.k. the sale.

"Over the people of 3 days, Haft said, the auction went done 24 rounds of bidding among the 5 groups looking to acquisition Compass’s inventory, equipment, intelligence property, and different assets. One of the bidders — a private-equity steadfast — submitted a bid but was disqualified due to the fact that it didn’t person the indispensable superior to implicit a deal," the Post reported.

For the clip being, assuming its bid gets approved, Caffè Nero plans to proceed operating the remaining 17 locations nether the Compass name. Haft told The Post it was unclear whether it would yet rebrand the cafes.

"A proceeding to o.k. the merchantability is scheduled for Feb. 26 in the U.S. Bankruptcy Court for the District of Columbia. If the merchantability is approved and closes, Caffè Nero would go the caller proprietor of substantially each Compass Coffee assets," according to Daily Coffee News.