Oakland-based coffee roaster and chain, Red Bay Coffee, has sought Chapter 11 bankruptcy protection, revealing over $3.3 million in debt, according to recent court documents.
Keba Konte, the founder of the well-known Black-owned coffee chain, initiated the bankruptcy process on August 29. Konte attributed the financial difficulties to the COVID-19 pandemic and escalating expenses resulting from two separate lawsuits.
In a declaration filed on September 5, Konte disclosed that the company’s assets are valued at approximately $251,000, while liabilities exceed $3.3 million. The debts include two loans, each amounting to $550,000. Red Bay Coffee intends to continue its operations under Chapter 11 as a debtor-in-possession. Konte’s attorney was unavailable for comment during the first-day motion hearing held at 2 p.m. on Wednesday.
According to the San Francisco Business Times, one of the lawsuits against Red Bay Coffee was initiated in 2018 by former employee Ashley Stewart. Stewart alleged she experienced sexual harassment during her two-year employment, including multiple instances of groping. Stewart claimed that her complaints were ignored by management and that she was terminated in retaliation. Konte had denied these allegations in 2019.
In a separate legal matter, a former landlord filed a breach of contract suit over a Los Angeles property that Red Bay Coffee no longer occupies. Konte had previously announced plans to open a new store in Los Angeles at a mixed-use development next to SoFi Stadium in Inglewood.
Red Bay Coffee, renowned for its commitment to quality, sustainability, and inclusivity, began its operations in Oakland in 2014. The chain operates locations in Oakland, Berkeley, and San Francisco, as well as a mobile coffee van.