A Brentwood restaurant that was ordered to close for ignoring COVID-19 masking requirements has filed for Chapter 11 bankruptcy.
The Crack’d Egg filed the petition Friday in U.S. Bankruptcy Court in Pittsburgh, and it will continue to operate while the owners reorganize.
The restaurant, owned by Kimberly Waigand, made headlines last month after the Allegheny County Health Department ordered it to close for flouting COVID-19 mask-wearing rules. In response, the restaurant filed a federal civil rights lawsuit against the department.
The shutdown order and the lawsuit are stayed while the bankruptcy case proceeds.
Attorneys said the restaurant’s financial woes are largely because of a loss in revenue following statewide COVID-19 mitigation rules that reduced maximum restaurant capacity to 25%.
“If the COVID hadn’t come along — not the COVID itself, but the capacity restrictions … I don’t think the bankruptcy would be happening at all,” said Jim Cooney, co-counsel for Crack’d Egg in the civil rights complaint.
“Takeout isn’t nearly enough,” he added. “And they have been doing the takeout, and they were doing in-person sales in a limited capacity, but it’s not nearly enough to be covering their expenses.”
According to the restaurant’s bankruptcy filing, it owes nearly $445,000 in unsecured debt to its creditors. The largest amount, $350,000, comes from Ms. Waigand’s husband, Donald.
The money for the investment came from a settlement Mr. Waigand received after he was in an accident, Mr. Cooney said.
Sy O. Lampl, another attorney for The Crack’d Egg, said he believed this is one of the first of many restaurants’ bankruptcy filings resulting from COVID-19 restrictions.
The restaurant has been under scrutiny since Allegheny County sought its closure after inspectors repeatedly saw employees without face masks, a health violation under the COVID-19 guidelines.
The federal lawsuit against the county Health Department soon followed, with Mr. Lampl decrying the restrictions as unconstitutional.
Ms. Waigand also appeared at a rally in Harrisburg opposing COVID-19 restrictions, declaring that — despite the rules — she did not require people in her restaurant to wear masks.
“I know this is no longer about a virus,” she told the crowd. “This is about control.”
The company’s reorganization plan is due by April 7.
Mick Stinelli: mstinelli@post-gazette.com; 412-263-1869; and on Twitter: @MickStinelli
First Published: October 12, 2020, 10:02 p.m.
