Upper Crust, the gourmet pizza chain that expanded rapidly over the last decade, but in recent years struggled with labor troubles, financial problems, and ownership disputes, has filed for bankruptcy protection.
The Boston company, which defaulted on its loan to TD Bank in late September, said it owes at least $3.4 million, including more than $500,000 to a Brookline construction company, $234,235 to a local food distributor, and $229,049 to former Massachusetts attorney general Thomas F. Reilly, who represented the business after leaving office, according to a list of creditors filed last week with the US Bankruptcy Court in Massachusetts.
The Chapter 11 filing, which seeks protection from creditors while Upper Crust reorganizes the chain, comes several days after the company shuttered its Waltham location and caps years of turmoil at the upscale pizza empire founded by Jordan Tobins in Beacon Hill in 2001. Upper Crust was profitable in the early years but has been hurt by lawsuits and the founder’s “improper diversion” of corporate assets for his personal use, such as the purchase of a Cessna plane, Dan Hurley, the firm’s chief financial officer, said in an affidavit filed on Friday.
Upper Crust has about 16 locations, primarily in Massachusetts, including four that are operated by franchisees, and will maintain normal operations during bankruptcy proceedings, said Harold B. Murphy, a Boston bankruptcy attorney representing the chain.
Upper Crust’s troubles began surfacing in 2009 when it was ordered by the government to pay workers nearly $350,000 in overtime, following an investigation by the US Department of Labor. Company executives then allegedly devised a scheme to get back the money that included slashing workers’ wages, prompting a class-action lawsuit filed in 2010 by former employees and a second labor department investigation.
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