SOUTHEASTERN N.C. — After undergoing a swift four-year expansion, Indochine restaurant group has filed for bankruptcy, with court documents indicating the restaurant is in arrears with vendors, loan companies, and the IRS, among others. However, the restaurant group’s numerous eateries remain open.
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Indochine and Indochine Express in Leland, Southport and Wilmington, as well as Cafe Chinois, are included in the chapter 11 bankruptcy documents, processed Oct. 4.
Chapter 11 allows for the restaurants to reorganize to pay back its creditors, while maintaining operations per normal. The restaurant group is required to devise a financial restructuring plan, to be approved by the courts and voted on by certain creditors.
Solange “Niki” Thompson is the owner of all the restaurants and signed off on the court filings. She opened the flagship Indochine on Wayne Drive in 2000 — well-known for its authentic Thai and Vietnamese and Asian-fusion flavors, as well as bright, art-ladened rooms, lush gardens and outdoor cabanas. Crowds often snake the building for entry at dinnertime, as the restaurant doesn’t take reservations.
Thompson waited two decades before expanding her brand. She launched satellite restaurants, called Indochine Express, at the end of 2020, with the first opening in Monkey Junction. She also opened Cafe Chinois in 2021 and continued to expand the express concepts onto Oleander Drive in Wilmington, as well as Southport and Leland — the latter which opened in 2023.
While Thompson did not answer Port City Daily’s request for an interview, she expressed to StarNews Thursday it’s been a “difficult time” lately, without going into further details. She told Wilmington Business Journal, the restructure will allow for operations to run more efficiently and she hoped diners would continue to support the eateries.
Chapter 11 bankruptcies have increased in the last decade, according to global software company Wolters Kluwers. There has been an 81% increase year-over-year in small business filings, with commercial chapter 11 filings up 32%.
Businesses are known to file for chapter 11 instead of 13, the latter often used for individuals or sole proprietorships. Sole proprietors who file under chapter 13 can also be held personally liable on what’s owed. Unlike chapter 7, which liquidates assets to pay back creditors, chapter 11 attempts to help businesses regain financial health under the eye of the courts while operating.
Larger companies, such as JCPenney, Bed, Bath and Beyond, Rue 21, and Tupperware Brands, have filed chapter 11 documents as of late. Rue 21 closed earlier this year, while Overstock.com eventually won Bed, Bath and Beyond’s name in a bankruptcy auction and Simon Property Group and Brookfield Asset Management acquired JCPenney in 2020. Tupperware just filed chapter 11 last month and continues to operate as it awaits the court to allow it to facilitate a sale process.
Filings from attorney George Oliver of Oliver & Cheek in New Bern indicate the Indochine restaurant group cumulatively has more than 70 creditors they’re indebted to. The law firm, which did not respond to PCD by press, was retained for $65,000 in total, with separate filings made for each of the six restaurant LLCs.
Each restaurant lists up to $50,000 in assets and $1 to $10 million in liabilities. Among the largest sums owed are $1.5 million in SBA loans and $2.3 million to North State Bank.
The IRS and North Carolina Department of Revenue are listed on the creditor matrix, among numerous corporate financial institutions: Parafin Inc. ($200,000 plus), Thread Capital ($150,000 plus), Expansion Capital ($92,000), Amsterdam Capital ($100,000 plus), and Rapid Finance ($100,000 plus), among others.
Most of the corporate claims are disputed, meaning there is a discrepancy between the creditor and debtor on what’s owed.
Also listed are quite a few local vendors in the tri-county region, such as Asian Life Balances, owed roughly $150,000 or more. Two dozen other small businesses are mentioned, along with individual names of people who live in Wilmington, Leland and Rocky Point, owed hundreds of thousands of dollars.
According to documents, Indochine restaurant group must have a restructuring plan and disclosure statement presented by Jan. 2, 2025 before a hearing takes place.
Because creditors’ rights are affected, they are allowed to vote on the financial plan. While creditors may recoup some money owed, it doesn’t guarantee full repayment. In chapter 11 filings, secured claims — supported by collateral — are normally given priority to be paid first and in full. This often includes bank lenders and government entities, if owed taxes.
In Indochine’s and its subsidiary cases, the documents indicate creditors “will receive notice of the date of the confirmation hearing” to attend and can “object to confirmation of the plan.” The court has to sign off on the restructuring proposal.
As well, per bankruptcy law, creditors won’t be able to collect debts or reach out to the restaurant group during proceedings. When a petition for bankruptcy is filed, an automatic stay goes into effect on collections. This includes creditors making phone calls, sending letters, suing, asserting a deficiency or repossessing property. Violations can lead to punitive damages and fines.
However, creditors can file an exception to discharge the restaurants’ debts, which must be done via judicial proceedings by filing a complaint by Jan. 11, 2025. There is no guarantee the court will agree.
Creditors can file proof of claims by Feb. 10, 2025 here.
A meeting of creditors, which is optional to attend, is scheduled for Nov. 12, 10 a.m. at the Randy D. Doub United States Courthouse, Room 108, 150 Reade Circle, in Greenville, North Carolina.
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