The parent company for one of Colorado’s most iconic restaurants has filed for bankruptcy.
According to a petition filed April 6 with U.S. Bankruptcy Court in Arizona, Summit Family Restaurants, which has owned Casa Bonita in Lakewood for 25 years, filed for protection from its creditors under Chapter 11 bankruptcy of the federal bankruptcy code. But plans are still on to reopen the famed restaurant.
Chapter 11 allows businesses and nonprofits to continue operating under current management while coming up with a plan of reorganization to repay creditors over time.
Robert Wheaton, CEO of Scottsdale, Ariz.-based Summit, said Summit still plans to reopen the restaurant late next month and rehire as many of its 150 to 300 employees that want to return. The restaurant has been closed since Gov. Jared Polis issued a stay-at-home order in March 2020.
Wheaton said the filing was triggered by a “landlord-tenant issue” and that while the landlord “was respectful of the environment we were dealing for a while, it reached a point where we were not able to see eye-to-eye.” A similar issue prompted Summit to file another Chapter 11 bankruptcy in 2011, when the company and its landlord were unable to agree on terms for the payment of a $723,489 judgment against Summit.
Casa Bonita is a major tenant in the Lamar Station Plaza, a shopping center on West Colfax Avenue in suburban Lakewood that is owned by a limited liability company set up by Broad Street Realty, a Bethesda, Md.-based company that owns and manages another shopping center in Greenwood Village and 15 other commercial properties in other states and Washington, D.C. A Broad Street spokeswoman declined to comment on Casa Bonita's bankruptcy or Wheaton's comments.
Famous for its cliff divers, a 30-foot waterfall, festive decor and unlimited honey-coated sopapillas, Casa Bonita has long been part of Colorado’s culture. Casa Bonita was the subject of a 2003 episode of “South Park” and an art exhibit at the nearby Next Gallery for three years. The Denver Broncos announced some of their draft picks at Casa Bonita in 2018.
A grassroots effort to save the restaurant was launched before the bankruptcy filing. A GoFundMe created last month has raised more than $14,000 toward its $100,000 goal.
Casa Bonita has remained closed during the pandemic, Wheaton said, because state restrictions “wouldn’t have allowed us to operate the business as what people know as Casa Bonita — we would not have been able to host groups, there would have been no entertainment and the arcade would not have been able to open”
It’s only been in recent weeks that restrictions have eased enough to properly reopen Casa Bonita, he said.
“Before COVID, we had 24 years of profitable operations and we hope to have another 24 years of that after we reopen. People love this business and we have received a lot of calls from customers about reopening,” Wheaton said. “We have three generations of visitors often and in some cases, four generations. It is amazing how many families say they came here with their parents and then later brought their children here and they later brought their kids.”
Summit’s petition lists fewer than 50 creditors and says it owes them between $1 million and $10 million and has assets in the same range. A balance sheet included in the filing lists assets valued at $3.68 million and liabilities valued at $4.42 million, including a $1 million Paycheck Protection Program loan and a $149,000 Economic Injury Disaster Loan from the U.S. Small Business Administration.
The first Casa Bonita restaurant was opened by Bill Waugh in 1968 in Oklahoma City and expanded to other states; the Lakewood location opened in 1973. The company was sold in 1982 to British food manufacturer Unigate, which resold the company a decade later to CKE Restaurants, owners of the Carl’s Jr. hamburger chain. The Lakewood location and another Casa Bonita in Tulsa, Okla., were spun off into a company called Star Buffet in 1997. The Tulsa location closed in 2007. Summit is owned by Star Buffet, which owns 21 other restaurants in seven states under several names.
9 News contributed to this report.