Etta’s Assets Are Scheduled for Auction

Etta founder David Pisor is no longer in charge of operations at his Bucktown restaurant, according to bankruptcy-related court documents. The news comes nearly two months after Pisor’s Etta Collective filed for bankruptcy in multiple states and as the once nationally recognized restaurant group’s assets head to auction next week.

The court’s order only pertains to Etta Bucktown, meaning Pisor remains at Aya Pastry. Pisor did not respond to a request for comment.

In the interim, the court has appointed Rafael Gaspar as manager of the Bucktown restaurant. The court has ordered that a sale must be finalized by Monday, April 15. Gaspar, who represents the debtors, owns a few Chicago-area restaurants including Fireside Restaurant in Ravenswood, and has no prior relationship with Pisor, according to court documents. Etta’s debtors made a motion to appoint Gaspar on March 1. His role is to “use his reasonable best efforts during the term to improve and maximize the financial performance of the restaurants and to keep them operational and maximize their value through the closing of the sale.”

In January and February, Pisor made five Chapter 11 bankruptcy filings covering his two Ettas in Chicago; Etta Scottsdale, Arizona; Aya Pastry in West Town; and his parent company, Etta Collective. He closed Etta River North in January after closing an Etta in Culver City, California, in December. He’s been involved in restaurants in Chicago, California, and Texas, and is a co-founder Gold Coast steakhouse Maple & Ash, though he is no longer affiliated with that restaurant group. Pisor’s relationship with Maple & Ash co-founder Jim Lasky deteriorated and the partners eventually reached an agreement to settle competing lawsuits against each other, and in January 2023 severed ties, with Pisor taking control of Etta properties, Aya Pastry, and Cafe Sophie under a new company, Etta Collective. Etta struggled after the split from the highly profitable Maple & Ash brand. Workers for Etta Collective in Chicago accused management of taking dental insurance premiums from their paychecks without paying for coverage in addition to other internal issues. Projects in Evanston, Downtown Chicago, and Texas have also been canceled or postponed due to the bankruptcy filings.

The order to appoint Gaspar was issued on March 12, according to a filing through the United States Bankruptcy Court of Delaware. The auction, scheduled for Monday, March 25, isn’t open to the public; parties had until the morning of Wednesday, March 20, to declare their interest in participating in the auction to undergo the appropriate financial background checks.

Two Etta locations, in Bucktown and Scottsdale, Arizona, remain, In late February, he filed notice of an agreement with John Leahy, a “stalking horse bidder.” The stalking horse — a bankruptcy term — who reaches an agreement with the bankrupt party to put in the initial auction bid and establishing a minimum bid for the party’s assets at auction. Leahy, who owns Lulu’s in Waikiki, Hawai’i, started the bidding at $675,000, according to court documents. The winning bid would also have to assume Etta’s debt, which includes $2.5 million owed to Wintrust. Other local vendors, from Rare Tea Cellar to Closed Loop Farms, are listed among Etta’s debts.

Pisor in February described Leahy as “a long-time colleague who is interested in helping us restructure and emerge stronger from this bankruptcy.” That means that Pisor could retain control over Etta if his colleague’s bid wins. Any deal, whether it’s involving Leahy, Gaspar, or another party, must close by the aforementioned April 15 date, according to court documents. Former Etta workers and those who have worked with Etta have told Eater there’s hope that a new owner could move Etta past its current financial crisis while reopening the River North location.

Aya Fukai, the founder of Aya Pastry, is owed $500,000 from Pisor after she left the business in October and sold her stakes in the West Town bakery for $700,000. She says she received $200,000 but has told Eater she’s not banking on seeing the rest. Pisor waited until February to mention Fukai’s departure and promoted a bakery worker to replace her. That replacement has since left Aya Pastry, a month after Pisor announced she’d taken the job.

Sources who have worked at Etta say that the news of the bankruptcy, and how the company handled employer dental insurance coverage has hurt business in Bucktown. The workers who remain are frustrated that their jobs are more difficult in the aftermath. They’re also dealing with low staffing levels, which hurt morale and created a rift between current employees and the former workers who were outspoken about their treatment. Meanwhile, vendors aren’t looking forward to working with Etta, given the company’s bankruptcy status.

In the wake of the bankruptcies and claims of mismanagement, Etta has launched a social media campaign leaning into normalcy and stability. An Instagram ad proudly announces, “the classics are back.” The phrasing was seemingly a response to former employees who claimed that popular items were removed off Etta’s menu because Pisor didn’t want to be reminded of former chef Danny Grant who had departed when Etta’s parent company was split in January 2023. In February, Pisor denied that claim.

The restaurant is even riding the success of The Bear, and involved in a gift card giveaway with other restaurants as part of a promotion benefitting radio station WBEZ offering a tour of the restaurants featured in the TV show.