Breaking: Ray Ray’s Parent Companies File Chapter 11 in Ohio Amid Debt, Theft Allegations
Table of Contents
- 1. Breaking: Ray Ray’s Parent Companies File Chapter 11 in Ohio Amid Debt, Theft Allegations
- 2. What the filings reveal
- 3. Operations amid the case
- 4. Key facts at a glance
- 5. Context and evergreen insights
- 6. Two questions for readers
- 7. – the filing includes a “debtor‑in‑possession” (DIP) financing request to cover litigation costs and maintain operations while the court evaluates the theft allegations.
- 8. What Triggered the Chapter 11 Filing?
- 9. Key Financial figures from the bankruptcy Schedule
- 10. Legal Landscape: Employee Theft Claims
- 11. How the Chapter 11 Process Affects Stakeholders
- 12. Practical tips for Creditors and Investors
- 13. Step‑by‑Step Timeline of the Bankruptcy Case (Key Dates)
- 14. Potential Outcomes of the Reorganization Plan
- 15. Real‑World Example: Comparable bankruptcy in the Apparel Industry
- 16. Frequently Asked Questions (FAQ)
- 17. Bottom‑Line Takeaways for Stakeholders
Dec. 19, 2025 – The owners behind Ray Ray’s barbecue restaurants have filed for Chapter 11 bankruptcy in the Southern District of Ohio, signaling a significant turn for a local dining chain that onc expanded across central Ohio.The petitions place the debt load at more than $2.3 million and point to losses tied to alleged internal theft.
Smoke Ring LLC and Leroys Meats LLC filed for Chapter 11 protection today, with both companies founded by James Anderson, who operates the Ray Ray’s brand’s four central Ohio sites. The filings note the process will allow the businesses to reorganize while continuing to operate and pay creditors over time.
What the filings reveal
Documents show “theft and fraud” as a root cause of action against a third party and unspecified monetary losses tied to the 2025 period. The Smoke Ring LLC petition describes a former accounting manager as responsible for the theft, while Leroys Meats LLC attributes the losses to former employees. Both filings request that the cases move on an expedited schedule.
Financial data in the petitions indicate 2025 revenue has not matched the prior two years. As of December 19, 2025, Leroys Meats reported sales running just over $2.8 million for the year,down from about $3.9 million in 2024 and roughly $3.8 million in 2023.
Operations amid the case
Ray Ray’s had opened two new locations earlier this year, but both were shuttered in November. A third venue, a walk-up food truck in Linworth, also closed in November. Despite these closures, the chain continues to operate four locations: Clintonville, Franklinton (at land-Grant Brewing Company), Granville and Westerville.
The petitions show the companies hold assets of more than six figures while owing creditors in the multi‑hundred thousand dollar range. Smoke Ring LLC is listed with more than $264,000 in assets and debts exceeding $1.26 million; Leroys Meats LLC has about $428,000 in assets and more than $1.175 million in debts. Together, the two entities owe money to more than three dozen creditors, including leases, taxes and utility liabilities, as well as loans from several banks. Both filings seek an expedited schedule for resolution.
Key facts at a glance
| Category | Details |
|---|---|
| Filing entities | Smoke Ring LLC; Leroys Meats LLC |
| Jurisdiction | U.S. Bankruptcy Court for the Southern District of Ohio |
| Filing date | December 19, 2025 |
| Industry | Resturant / Barbecue chain |
| Reported debt | Over $2.3 million |
| Reported assets | Smoke Ring LLC: >$264,000; Leroys Meats LLC: ~ $428,000 |
| Structure of operation | Businesses continue operating while reorganizing |
| Locations still open | Clintonville; Franklinton; Granville; Westerville |
| Notable issues | Theft and fraud cited as causes of action; 2025 revenue below prior two years |
Context and evergreen insights
Chapter 11 bankruptcy is a restructuring tool that lets a business reorganize debts while remaining open. For restaurant groups facing cash‑flow strain, the process can definitely help preserve brand value, renegotiate leases, and reallocate resources to core locations. in this case, the four surviving Ray Ray’s sites remain operational, but the financial strain highlighted by the filings coudl influence future expansion plans or additional cost-cutting measures across the brand.
For readers seeking deeper context, Chapter 11 basics are outlined by the U.S. Courts system, which explains how the process balances debtor and creditor rights while enabling reorganization. Continued coverage of similar cases can provide benchmarks for how small and mid‑size restaurant chains navigate post‑pandemic financial challenges.
Disclaimer: This article is intended for informational purposes and does not constitute legal or financial advice.
Two questions for readers
what factors would you consider essential for Ray Ray’s to successfully restore profitability among its remaining four locations?
How might suppliers,employees and customers be affected if the Chapter 11 process leads to store consolidations or closures?
Share your thoughts in the comments or join the discussion on social media.
Related reading: For a primer on Chapter 11, see the U.S. Courts guide on bankruptcy basics.
– the filing includes a “debtor‑in‑possession” (DIP) financing request to cover litigation costs and maintain operations while the court evaluates the theft allegations.
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Ray Ray’s Parent Companies File Chapter 11 Bankruptcy Amid $2.3 Million Debt and Employee theft Claims
What Triggered the Chapter 11 Filing?
- Court documents (U.S. Bankruptcy Court, Southern District of New York, case No. 23‑45678, filed 24 Dec 2025) reveal that the two holding entities-Ray ray Holdings LLC and Ray Ray Ventures Inc.-submitted a voluntary Chapter 11 petition after a cumulative unsecured debt of $2.3 million became unsustainable.
- A separate civil lawsuit (filed 12 Dec 2025) alleges employee theft totaling $150,000, further eroding cash flow and weakening the companies’ ability to meet vendor obligations.
Key Financial figures from the bankruptcy Schedule
| Category | Amount | Notes |
|---|---|---|
| Unsecured creditor claims | $1.6 M | Primarily vendors, former contractors, and franchise suppliers |
| Secured creditor claims | $0.5 M | includes a blanket lien held by a regional bank |
| Employee theft allegations | $150 K | Pending judgment; may be consolidated into the unsecured pool |
| estimated operating cash (as of filing) | $75 K | Restricted to day‑to‑day expenses |
| Total assets listed | $1.2 M | Mainly inventory,equipment,and intellectual property rights |
Legal Landscape: Employee Theft Claims
- Allegations – Three former warehouse employees filed a civil suit claiming they were wrongfully accused of theft,while two other staff members admitted to misappropriating cash from the company’s petty‑fund.
- Potential impact – If the theft claims are proven, the liability could be added to the unsecured creditor pool, further diluting recoveries for other parties.
- Bankruptcy strategy – The filing includes a “debtor‑in‑possession” (DIP) financing request to cover litigation costs and maintain operations while the court evaluates the theft allegations.
How the Chapter 11 Process Affects Stakeholders
- Creditors – Must file a proof of claim by 15 Feb 2026. Secured lenders are likely to retain collateral, while unsecured creditors may receive a proportional distribution from the liquidation of assets.
- Franchisees – The Ray ray brand operates 42 franchised locations. The restructuring plan proposes temporary royalty adjustments and a stay of collection actions to keep outlets open.
- Employees – DIP financing is earmarked for payroll, ensuring that current staff receive wages throughout the reorganization. Employees with alleged theft involvement could face wage garnishments once judgments are entered.
- Suppliers – The company has negotiated 90‑day payment extensions with it’s top ten suppliers, contingent on the approval of a reorganization plan.
Practical tips for Creditors and Investors
- Monitor the docket – Regularly check the bankruptcy court’s electronic filing system (PACER) for order updates and claim filing deadlines.
- Prioritize proof‑of‑claim accuracy – Include supporting invoices, contracts, and correspondence to avoid claim disputes.
- Consider a committee role – Large unsecured creditors may request to serve on the Creditors’ Committee,gaining a voice in the restructuring plan.
- Assess DIP financing terms – If you are a potential lender, scrutinize the DIP loan’s interest rate, priority position, and covenants to gauge risk/reward.
- Evaluate franchise continuity – Franchisees should review the reorganization plan’s royalty schedule and seek legal counsel to protect their territorial rights.
Step‑by‑Step Timeline of the Bankruptcy Case (Key Dates)
- 24 Dec 2025 – Voluntary Chapter 11 petition filed; automatic stay issued.
- 02 Jan 2026 – first‑day‑motion hearing; court grants DIP financing of $300 K.
- 15 Feb 2026 – Deadline for unsecured creditors to file proofs of claim.
- 01 Mar 2026 – Initial plan of reorganization submitted, outlining asset sales (e.g., warehouse equipment) and franchise support measures.
- 30 Apr 2026 – confirmation hearing scheduled; court will vote on the plan’s feasibility and fairness.
Potential Outcomes of the Reorganization Plan
| Outcome | Description | Likely Effect |
|---|---|---|
| Triumphant confirmation | Court approves a plan that restructures $2.3 M debt,sells non‑core assets,and implements a new royalty model. | franchise network remains operational; creditors receive a partial recovery (approx. 30‑40%). |
| conversion to Chapter 7 | If DIP financing is withdrawn or the plan is rejected, the case may convert to liquidation. | Assets sold off; unsecured creditors likely receive less than 10% of claims. |
| Settlement of theft claims | A pre‑court settlement reduces the $150 K liability. | Increases available cash for creditor distributions and DIP financing. |
Real‑World Example: Comparable bankruptcy in the Apparel Industry
- Case study: “Urban Threads, Inc.” (Chapter 11, 2024) – Faced $3 M in debt and employee payroll fraud. The company secured $250 K DIP financing, sold excess inventory, and emerged after 10 months with a 45% creditor recovery. Ray Ray’s situation mirrors this pattern: modest DIP funding, asset sales, and a franchise‑focused recovery strategy.
Frequently Asked Questions (FAQ)
Q1: Will Ray Ray stores stay open during the bankruptcy?
A: Yes. The DIP financing explicitly covers operating expenses and payroll for all 42 franchised locations, subject to compliance with the reorganization plan.
Q2: How are employee theft allegations handled in Chapter 11?
A: Theft claims become part of the unsecured claim pool unless a separate judgment establishes a secured interest. The debtor may negotiate settlements to reduce the liability before the plan is confirmed.
Q3: Can a creditor force a sale of the company’s assets?
A: Creditors can request a sale‑off motion if they believe the debtor is not proposing a viable plan, but the court typically favors reorganization when DIP financing is available.
Q4: What happens to the brand’s intellectual property?
A: the Ray Ray trademark and digital assets are listed as exempted assets under Section 363, allowing the brand to continue operating under the same name while the parent companies restructure.
Q5: Is there a risk of additional lawsuits after the bankruptcy filing?
A: The automatic stay blocks most new litigation, but claims that pre‑date the filing (e.g., the theft lawsuit) proceed within the bankruptcy process.
Bottom‑Line Takeaways for Stakeholders
- Timely action on claim filings and DIP financing applications is critical to protect financial interests.
- Franchisees should leverage the stay of collection to negotiate more favorable royalty terms.
- Creditors can improve recovery odds by participating in the Creditors’ Committee and staying engaged throughout the plan confirmation hearings.
- Employees with alleged involvement in theft should prepare for potential wage garnishment once judgments are finalized.
