Chef and businessperson Mark McEwan at the opening of his food hall at Yonge & Bloor.
The company behind Canadian chef and businessperson Mark McEwan has filed for creditor protection, as ongoing financial struggles were amplified during the COVID-19 pandemic.
McEwan Enterprises, which operates six Toronto restaurants, three grocery locations, and a catering operation, has approximately $11 million of outstanding liabilities and a cash balance of $1 million, according to a court filing.
The company’s liabilities include a $2.3 million loan from its largest shareholder, Fairfax Loans; $2.3 million owed to suppliers; approximately $500,000 in customer gift cards; and $1.2 million in accruals and vacation payable.
The filing by the appointed monitor, Alvarez and Marsal, states that many of the company’s locations have been historically successful and profitable; however certain locations have been underperforming for a number of years.
“The underperforming locations, even without taking into account the impacts of the COVID-19 pandemic, have proven to be unsustainable based on their negative financial results,” the filing states. The impacts of COVID-19 on Toronto's restaurant industry only heightened the company's pre-existing financial challenges.
The McEwan Grocery Locations were also impacted by the pandemic, "with two of the three McEwan Grocery Locations in particular being negatively affected by greatly reduced foot-traffic at their locations and much lower sales.” As a result, the business has experienced “significantly reduced” revenues for 2020 and 2021.