Etta Collective, which operates the Etta and Aya Pastry eateries in Chicago, has filed for Chapter 11 bankruptcy in an attempt to restructure the company’s finances.
Owner David Pisor initially filed for Chapter 11 bankruptcy on Jan. 18 for the Etta location in Scottsdale, Arizona, one of two currently operating locations of the restaurant, according to court documents. The other is in Bucktown at 1840 W. North Ave. A third location in River North closed in January.
The Chicago locations were added to the filing Feb. 1, along with Aya Pastry and Etta Collective.
Formerly part of the nearly 10-year-old Maple & Ash restaurant group, Pisor sued his former partner, James Lasky, during an acrimonious split in 2022. A settlement agreement in January 2023 resulted in Pisor getting the Etta and Aya Pastry restaurants, while Lasky kept the successful Maple & Ash steakhouses in Chicago and Scottsdale, which are two of the top-grossing restaurants in the country.
Investors are engaged in an ongoing lawsuit against Lasky’s Maple & Ash management company, alleging misappropriation of restaurant funds, including more than $7 million in Paycheck Protection Program loans received during the pandemic.
Pisor and his Etta restaurants are not party to that lawsuit.
Since breaking off on their own, the Etta restaurants have struggled financially.
In July 2023, Pisor took out a $2.5 million loan at Wintrust Bank, with a principal repayment of $500,000 due in January, and the entire balance to be paid by July 2024. On Jan. 17, Wintrust filed a complaint against Pisor and Etta in Cook County Circuit Court for defaulting on the loan agreement when the $500,000 payment was not received, sweeping the balance due from bank accounts of Etta and Pisor. Etta Scottsdale filed for bankruptcy the next day.
Subsequent sweeps by Wintrust have reduced the loan balance to about $1.8 million as of Jan. 31, according to the bankruptcy filing. In addition to the Wintrust debt, Etta Bucktown owes $1.3 million on a 2017 Small Business Administration loan.
A high-rent Etta location in Culver City, California, was permanently shuttered in December, while Etta River North closed Jan. 22. Employees of the River North location were notified of the abrupt closing the same morning.
Pisor said in an interview Friday that outstanding employee paychecks were delayed slightly because he had to wait for the court to release the funds.
“It was delayed by 36 hours, and unfortunately that made for stress on all of us, but we got it taken care of and so everybody’s now been paid in full,” Pisor said.
The decision to close the River North location was based on the “general health and popularity of Bucktown.”
“The marketplace has been supporting our restaurants in a really strong way, and our numbers are up from last year at Bucktown if that’s any indication that there are a lot of people that want to make sure we make it as well,” Pisor said.
The entire Etta restaurant group is up for sale as it navigates bankruptcy. On Feb. 2, Chicago-based restaurateur John Leahy made a $600,000 bid for the restaurant assets, setting a ground floor for other investors to step up and buy Etta. Leahy also agreed to make a $140,000 loan, if needed, to cover payroll and other expenses.
With Leahy’s financial backing and court approval, Pisor said he hopes to “rebuild” and “bring a new life back” to the River North location at 700 N. Clark St.
He also hopes to come out on the other side of the bankruptcy proceeding in a new partnership with Leahy to take the Etta Collective brand forward. Pisor added that “ideally” Etta Bucktown and Aya Pastry will also continue in their current forms.
The three Chicago restaurants employ about 148 full-time and 43 part-time workers, according to the bankruptcy filing.
“I’m doing everything I can to protect the entities that we have now and the amazing people I have on my staff, and it’s been difficult,” Pisor said. “We’re working hand in hand now with the bank, and our hope is that we can keep all these cool operations going.”
