“Top Chef” alum and celebrity personality Mike Isabella filed for Chapter 11 bankruptcy protection September 6 in federal court. The chef’s restaurant group, Mike Isabella Concepts, was once a $30 million empire comprised of more than a dozen restaurants, multiple stands at Nationals Park in Washington, D.C., and a 41,000-square-foot food hall at Tyson Galleria. But the company struggled in the wake of a March sexual harassment lawsuit that accused the group of rampant sexual harassment in Isabella’s restaurants, stemming from, but not limited to, the acclaimed chef’s own actions.
According to The Washington Post, the suit, filed in D.C. Superior Court on the case of Chloe Caras, a former regional manager for Mike Isabella Concepts, “had an almost immediate effect on sales and led directly to the Washington Nationals cutting ties with the chef.” It also soured media coverage, including an outright ban on all of his concepts on Eater lists and maps.
Isabella, his partners, and their attorneys said at the time, “Simply put, the allegations of an unwelcoming or hostile work atmosphere are false. Harassment, discrimination, bullying, abuse, or unequal treatment of any kind whatsoever are not tolerated at MIC,” and that the company hired a dedicated human resources director in 2017 and made other policy changes long before Caras threatened to bring her lawsuit. Financial terms of the suit’s May settlement were confidential.
Compounding the issue, the chef was just months removed from opening his ambitious Isabella Eatery at the time, a nine-concept food hall estimated to cost $40 million. It closed in August, less than nine months after opening. Isabella also shut down Requin Brasserie in Northern Virginia, as well as two locations of Graffiato. This included Isabella’s Chinatown restaurant, which was his first after rising to TV stardom from “Top Chef” and “Top Chef All-Stars.”
“Perhaps Isabella Eatery missed the mark because I became too impressed with myself and thought I [could] make anything work,” Isabella said in a statement after the August closing. “Perhaps it was because of the way I presented our offerings at Tysons Galleria. Perhaps the space was too grand or perhaps the dining public was just not as excited as we were about a ‘restaurant emporium’ like the one we tried to provide. Whatever the reasons, we gave it our best shot.”
Per an article in The Washington Post, an employee added: “After the whole sexual harassment [lawsuit] thing, things started slowly going down. Since then, no one wanted to be associated with Mike Isabella, whether [the accusations] were true or not.”
In a sit-down interview with the publication, Isabella said he hopes the bankruptcy filing can help the company avoid future closures. “The bankruptcy is a tool for me to basically restructure my finances and have an opportunity for a fresh start,” he said.
Isabella was also in court September 7 fighting to maintain his Kapnos Taverna inside the Hotel at the University of Maryland in College Park. The landlord is looking to evict Isabella, according to The Washington Post, after suing in May for more than $60,000 in back rent. Isabella countered that he paid three months back rent and tried to renegotiate a lower monthly payment.
The bankruptcy filing halts the eviction process since it automatically suspends judgments, collection activities, and repossessions.
Two of Isabella’s eateries, Kapnos Kouzina in Bethesda, Maryland, and Requin at the Wharf in the District, are not part of the bankruptcy proceedings. Isabella told The Washington Post, “Basically those are successful ventures right now.”
If they were included in the filing, the bankruptcy court could have used their proceeds to pay creditors of other underperforming restaurants.
Isabella went on to add that “bad press” was responsible for sagging sales. “Unfortunately, I had some negative press toward me. I lost a lot of that business that carries me through the summer, in all my restaurants,” he said in the article.
Isabella and his executives will remain atop the company. The largest creditors include: Eagle Bank ($764,000), M&T Bank ($775,096), and American Express ($313,851). In addition, Isabella is on the hook for more than $715,000 to Eskridge. Isabella told The Washington Post employees would have priority claim and hopes to prevent talent from leaving.