Vien Dobui, owner of Công Tử Bột in Portland, Maine, just celebrated a modern economic milestone: His restaurant has been dismissed from bankruptcy. After opening in 2017 and turning profitable in 2019, he, like everyone else, was forced to close in 2020. Then came a series of financial hardships and hits that ultimately made filing for Chapter 11, Subchapter 5, bankruptcy his best option. Here, Dobui outlines what made it seem like the best path forward and, despite plenty of roadblocks, how his restaurant made it through to the other side.
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Công Tử Bột’ while shuttered in April 2020. (Credit: Getty Images) |
“After lockdown, we didn’t fully reopen until August 2021, and that was for full-time takeout. Until then we were relying on loans like PPP and EIDL, which we used to hold things together until a path toward full reopening felt more clear. We also got a $660K grant in May 2021 from the Restaurant Revitalization Fund, which initially prioritized restaurants owned by minority groups and women. We decided to reopen in June, right before Maine’s tourist season started. So knowing the grant money was coming, I started spending money on renovations, cleaning, staff training, putting down deposits, everything to get us ready to go.
“Then, we got a letter in late June saying our grant had been canceled. It turned out we were one of 3,000 restaurants affected by a lawsuit over the RRF by white business owners, claiming the prioritization of minorities and women was discriminatory. I already committed all these funds, so it put us in a deep hole. Over two years, I took on a total of $500K in debt from the disaster loans, and another $250K in loans to get the restaurant open.
“At the end of 2022, we reopened for full-service dining and started making some more money, but it wasn’t enough. There’s a cultural expectation in America around how much Vietnamese food should cost, especially if it’s not presented as fine dining, and some people just aren’t willing to pay what the food is worth. We had to get creative. Plus, I was paying around $20,000 a month in loans, taking on loans to pay off other loans, which is the worst thing you can do.
“I wasn’t really ready to think about bankruptcy the first time someone mentioned it. It was so scary; I thought it just meant you had to close your business. But the stress was just not sustainable. The decision to file came from my wife and my father-in-law, who is a partner in the business. We spoke to a business advisor, who mentioned there are several kinds of bankruptcy, including Chapter 11, Subchapter 5, specifically for small businesses. The process itself is expensive. You have to put up a $10K retainer for a lawyer, which we didn’t have and relied on family for.
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The restaurant's open kitchen and bar. (Credit: Getty Images) |
“We officially filed in March, and we had about 13 weeks to show the court that we would still be financially viable if we had a smaller debt load. But during that time, they could have forced us to liquidate and close. We were sending financials to the court every week, for them to look at the trend lines and determine if we can survive or not. And it was nerve-racking—March is a slow month in Portland dining, and April was slower than we anticipated. We presented our projections for the summer, Portland’s busy season, but I worried it wouldn’t be enough.
“The thing that turned it around was The New York Times publishing its “36 Hours in Portland, Maine,” which mentioned us. We didn’t even know it was happening until the day before. After that, we started getting busier consistently, and almost every fourth customer said they’d heard about us through that. It was enough for the lawyers to believe we could be viable on our own, and discharge the bankruptcy. We went from $20,000 a month in debt repayment to $2,600 a month. And having debt on our balance sheet of almost $800,000 to $150,000.
“We had a lot of privileges. Who can put up money for a lawyer when you’re already struggling with so many other things? And not every restaurant is in a position to get national press. It’s not lost on me how incredibly lucky we are. But I know this is something more restaurants are considering—our lawyer said in the last five years they only had two or three restaurant cases, and now they have over 20.
“It was an incredibly challenging thing to do. We had to change bank accounts multiple times, and we had to tell our staff that there was a risk of the restaurant closing for good. But now, I wish I had known this was an option and done it sooner. It’s not a magic bullet. But we’ve handled an incredibly busy summer, we navigated bankruptcy, [and] the whole staff is feeling really resilient.” —Vien Dobui, as told to Eater correspondent Jaya Saxena |
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| Red tape and high rent are making it nearly impossible for these restaurants to stay open. |
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