CRANBERRY TWP — Cranberry-based Ed’s Beans Inc., owner of Crazy Mocha and Kiva Han coffee companies, filed for Chapter 11 bankruptcy Monday.
The filing, made in the U.S. District Court for the Western District of Pennsylvania, cited a debt load of roughly 10 times as much as its assets as a reason for the company’s bankruptcy, its financial difficulties exacerbated by the COVID-19 pandemic.
The company indicated that it has assets in the $100,000 to $500,000 range and listed more than $4.75 million in loans, rent and other debt that the company owes to more than 50 creditors.
Its largest debt is an outstanding $2.38 million that Ed’s Beans Inc. owes on a loan to First Commonwealth Bank, and the company owes on several other loans to the Pennsylvania-based bank. It also owes nearly $700,000 to Ken Zeff, from whom Crazy Mocha was purchased in 2018.
Ed’s Beans Inc. also owes roughly $200,000 in rent for six of its locations as well as $25,000 to Duquesne Light Company for overdue electric bills.
While a Crazy Mocha had opened in Cranberry Township, along Freedom Road, the site has since closed. Kiva Han Coffee, a wholesale bean roaster, operates out of Thomson Business Park in the township. Kiva Han will continue to operate during the proceedings, the company noted.
A statement of operations filed with the bankruptcy court notes that Ed’s Beans Inc. had a net operating loss of $349,000 in 2019, although the company cited in another filing that the “unprecedented events caused by the COVID-19 pandemic” and associated costs of shutdowns as its main reason for seeking a Chapter 11 filing.
Chapter 11 bankruptcy typically leads to the reorganization, rather than the shutdown, of business operations.