Capital Teas Files Chapter 11
Capital Teas’ Annapolis store will remain open; 10 of 22 others will close
US
Capital Teas announced July 12 that it has commenced a formal proceeding to reorganize to better position itself for the future. To facilitate this restructuring, the company filed a voluntary petition under chapter 11 bankruptcy in the district of Maryland.
Capital Teas has obtained interim debtor-in-possession (DIP) financing and is negotiating for an additional DIP financing facility package. Subject to court approval, such financing, combined with the company’s cash from operations, is expected to provide sufficient liquidity during the chapter 11 process to support its continuing business operations and minimize disruption to customers.
“We have conducted an extensive review of alternatives to address Capital Teas’ needs, and we believe that pursuing a reorganization through chapter 11 is the best path forward now,” said chairman and c.e.o. Peter Martino. “Reducing the company’s lease obligations and restructuring our debt through the chapter 11 process will best position Capital Teas for future success.”
The staff was reduced from 149 to 109, said Martino. The company will continue to operate 12 Capital Teas locations in Maryland, Washington, D.C., and Virginia, including its flagship store in historic Annapolis.