After falling sales and the inability to keep a CEO locked down, Kona Grill may be forced into bankruptcy. The Arizona-based casual-dining chain said that it is in discussions with lenders to see if there are alternatives. However, the result of these discussions meant that it might have to file for Chapter 11 bankruptcy regardless.
In its annual report, Kona Grill, said, “It is possible that even a successful implementation of one of the strategic alternatives that we are pursuing will require us to make a filing for protection under Chapter 11 of the U.S. Bankruptcy Code.” Kona Grill also stated in their annual report that they have $33.2 million in secured debt and had missed their quarterly payment due in March.
By the end of 2018, Kona Grill had just 42 restaurants operating, with earnings before interest, taxes, depreciation and amortisation being negative $15.9 million.