The operator of Café Fiorello and other iconic New York restaurants filed for Chapter 11 bankruptcy protection after years of financial distress, including debt from merchant cash advances.
The Fireman Group of Cafe Concepts Inc., a restaurant chain that includes iconic Café Fiorello locations in New York and Washington, D.C., filed for Chapter 11 bankruptcy to reorganize its business and restructure its debt obligations after facing merchant cash advance loan disputes, according to court documents.
The restaurant and cafe operator owns nine restaurants after closing two locations, Redeye Grill in New York and USA Brooklyn Delicatessen in Brooklyn, in July 2026.
The debtor filed its petition on Aug. 9, 2026, as it had been overloaded with debt for years dating back to before the Covid-19 pandemic, with construction cost overruns at various locations and losses from a fire at one of its restaurants, according to a declaration from Chief Restructuring Officer Jordan Meyers of SierraConstellation Partners LLC.
Covid-19 pandemic led to financial distress
Government-mandated shutdowns and a collapse of Broadway shows, tourism, and the Midtown Manhattan office market during the pandemic were devastating to the debtor’s restaurants.
The dining establishments have close ties to New York’s theaters, concert halls, and visitor economy, which had a slow recovery from the pandemic’s effects. As a result, its restaurants’ traffic didn’t return to prepandemic levels until the fourth quarter of 2025.
To make it through the pandemic and its aftermath, the debtor tapped several loan programs to fund its business operations, including the Paycheck Protection Program, Economic Injury Disaster Loan Program, and finally in spring 2024, it began obtaining merchant cash advance loans to fill its liquidity gaps.
The debtor also allegedly began missing rent payments to landlords, according to court papers.
Financial distress worsened
Traffic and business did not improve as the merchant cash advance loans became due, and the debtor obtained more advances. Fixed payments to lenders consumed a large portion of the debtor’s gross receipts, which worsened its financial situation and further strained its operations, according to the declaration.
The debtor also fell behind on sales tax payments, and it had difficulty dealing with vendors. In March 2026, the debtor’s financial burdens became unsustainable, and it ceased payments on the merchant advance loans and began paying its sales taxes again.
Debtor hires restructuring adviser
The restaurant operator hired SierraConstellation Partners as its restructuring adviser to negotiate payments on its debts, but certain merchant cash advance lenders pursued litigation, which led the debtor to file for bankruptcy protection.
“Faced with the imminent inability to continue operating, the debtor commenced these Chapter 11 cases to stabilize operations and restore access to their revenues,” Meyers said in the declaration.
The lead debtor, S.M.F. Group Inc., and 21 affiliates filed their petition in the U.S. Bankruptcy Court for the Southern District of New York, listing over $26 million in assets and over $39 million in debts, including over $9.9 million in secured debt.
Seeks debtor-in-possession loan
The Fireman Group of Cafe Concepts will also seek up to $6.5 million in debtor-in-possession financing that includes $2.3 million in new money and a roll-up of prepetition debt. The debtor will also seek litigation to recover $5.9 million in holdback amounts from merchant cash advance lenders, according to the debtor-in-possession financing motion.
The debtor’s largest unsecured creditors include Vornado Realty Trust, owed over $5.9 million in rent; New York State Department of Taxation, owed over $3.1 million; Samson MCA LLC, owed over $1.6 million; InKind Cards Inc., owed over $1.5 million; Webfund LLC, owed over $1.4 million; Edison Management LLC, owed over $1.1 million.
Another restaurant operator, Subway franchisee MTF Enterprises LLC, which owns 43 Subway sandwich restaurants in Maine, New Hampshire, Pennsylvania and Virginia, filed for Chapter 11 bankruptcy protection on Jan. 21, 2026, after allegedly defaulting on merchant cash advance loans, Restaurant Dive reported.
S.M.F. Group restaurants:
- Bond 45, 221 W. 46th Street, New York
- Brooklyn Diner, 212 W. 57th Street, New York
- Brooklyn Diner, 155 W. 43rd Street, New York
- Café Fiorello, 1900 Broadway, New York
- Café Fiorello, 1001 Pennsylvania Ave. NW, Washington, D.C.
- Café Paradiso, 144 W. 65th Street, New York
- Dell’ Arte, 900 7th Ave., New York
- Paris Bar and Ls Jardin, 120 W. 57th Street, New York
- USA Brooklyn Delicatessen, 200 W. 57th Street, New York.
- Source: Declaration
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