Watts Grocery and its catering arm Sage & Swift Gourmet Catering — among the area’s oldest restaurant companies — filed for bankruptcy protection this week.
Chef Amy Tornquist, who owns the restaurant and catering company with her husband, Jeremy Kerman, said both will remain open while the business restructures its debt.
“It’s a really tough decision,” Tornquist said. “The business part is super rational, but talking about it is tough. ... We’re in a good position to regroup.”
The company has debts of between $500,000 and $1 million, according to the bankruptcy filings, with assets of the same amount. The vast majority of the debt is tax related, with leins from unpaid federal taxes totaling $432,000 and state leins at $57,000. Other creditors included Watts Grocery’s landlord, food vendors, employees and personal loans.
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Tornquist opened her catering company Sage & Swift in 1993 and opened Watts Grocery on Durham’s Broad Street 14 years later. At 12 years old, Watts Grocery is among the city’s longest running restaurants, known for upscale Southern cooking and a popular brunch.
The couple owns the Sage & Swift building in southeast Durham, which the city values at $838,000. The restaurant space, which they don’t own, is in the the much more residential district near the North Carolina School of Science and Mathematics, away from Durham’s bustling downtown.
In a phone interview, Tornquist noted the restaurant’s evolution over the years from trendy to established.
“Restaurants are hard,” Tornquist said. “This gives us the opportunity to do the right thing and get back on track. It’s been a fairly large slide. ... As the neighborhood has moved downtown, we’re an outpost.”
Compounded by the inherent stresses of running a business, Tornquist said she has also been suffering from illness and the loss of her mother three years ago. Another business, a bakery called Hummingbird, closed after four years, which Tornquist called a failure and a drain on the company’s finances.
Tornquist said the catering company and the restaurant remain successful, but put the fault of the bankruptcy on herself.
“The concept is solid; I don’t think the restaurant is unsuccessful,” Tornquist said. “I may have been unsuccessful. I take it on myself; it is my fault. I hope I get an opportunity to reset.”
In seeking chapter 11 bankruptcy protection, which allows the restaurant and catering company to restructure its debt without closing, Tornquist said the notion of closing was entertained.
“We’re best suited to be here turning things around, rather than plying our skills and trade somewhere else,” Tornquist said. “I think we still have a lot to offer.”