GRAND RAPIDS, Mich. (WOOD) — A Grand Rapids restaurant has filed for bankruptcy.
Matchbox Diner & Drinks, located at 1345 Lake Drive near Robinson Road in Eastown, filed for Chapter 11 bankruptcy on May 9, according to court documents. The restaurant is working to reorganize an intends to stay open, its attorney told News 8 partner Crain’s Grand Rapids Business, which first reported the bankruptcy.
Matchbox was profitable when it first opened in January 2016 up until the pandemic, co-owner and manager Nathan Orange said in documents filed with the Western District of Michigan Bankruptcy Court. It was forced to close during the pandemic, and when it re-opened, business did not rebound. On top of that, COVID-19 increased the business’ operating costs, Orange said.
In 2022, co-owner Eric Chaitin took out more than $1.2 million in economic injury disaster loans between January and March.
At the time, Chaitin also owned Mermaid Bar & Grill and Baldy’s Smoked Meats in Saugatuck, and that same year opened Playa Taco’s & Tequilas near Holland. His other restaurants were also struggling financially, Orange said, so Chaitin took money from Matchbox and loaned close to $620,000 to Playa and around $430,000 to his Saugatuck operation.
In June of that year, Orange became an owner of Matchbox, he said. He managed the day-to-day operations of the restaurant, while Chaitin managed the finances. In the spring of 2023, Orange discovered loans Chaitin had taken out to run Matchbox and his other businesses.
“I confronted Chaitin about these loans and we mutually agreed that I would take over financial management of Matchbox,” Orange wrote in the court documents.
He wrote that he changed the bank account passwords that summer.
That fall, Orange discovered Chaitin had taken out Merchant Cash Advance loans for his other businesses, and had allegedly pledged Matchbox Diner & Drinks as a guarantor, court documents say.
Chaitin’s three other restaurants were all listed for sale after closing for the season last year.
In January of this year, the Merchant Cash Advance lender sued Matchbox Diner & Drinks as a guarantor, Orange said in the court documents.
He said a financial advisor found that while Matchbox makes enough revenue to continue to operate under normal circumstances, it does not make enough to pay off the MCA and EIDL loans.
“We’re planning on being able to reorganize the company. Matchbox is open, it’s running and, other than these old loans, is successful,” attorney Steve Bylenga told Crain’s. “By the time we’re done with this, it should be around for a long time.”
Orange previously told News 8 he was in the process of taking full ownership of the restaurant. As part of the reorganization, the restaurant is looking to get rid of Chaitin’s equity interest, court documents say.
