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Law360 (April 2, 2020, 11:15 AM EDT) -- The parent company of German restaurant chain Vapiano has announced it will begin insolvency proceedings, saying it has found no way to escape the liquidity crunch brought on by COVID-19 closures of nearly all its worldwide locations.
In an announcement late Wednesday, Vapiano SE said it will file an application to begin insolvency proceedings in the German courts, saying it was unable to reach an agreement with "financing banks and major shareholders" for contributions to a "comprehensive financing solution."
"In the absence of an agreement on such a financing solution, prospective funding from government COVID-19 support programs could not be requested," the restaurant chain said.
Two weeks ago the company said the pandemic has forced it to close nearly all of its 230 Italian casual dining restaurants worldwide, and that with virtually no income coming in, if it could not get new financing it would be forced to file for bankruptcy within three weeks.
In Wednesday's announcement, the company said it will immediately begin proceedings for Vapiano SE in Cologne, Germany, and that it is evaluating whether its subsidiaries will have to file as well. Franchise operations will not be directly affected, it said.
--Editing by Marygrace Murphy.
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