Jose Garces Files for Bankruptcy in Wake of Several Lawsuits

After an onslaught of lawsuits and financial woes, Philadelphia chef and Food Network star Jose Garces has filed for Chapter 11 bankruptcy and will sell his restaurant group Garces Group.

While Garces used the group to build a mini empire in Philadelphia, his attempts to break into the NYC dining scene never really panned out. Given this latest news, his time in New York is officially a flop after just two middling years. And now, with the news of bankruptcy and subsequent selling of his restaurants, his time in New York is likely over for now.

While Garces gained acclaim for his Philadelphia tapas restaurant Amada, his efforts to bring it to NYC started on rocky territory. He opened the New York location in 2016 — not with major expansion plans in mind but rather in an attempt to make back the money he’d lost in a restaurant closure. The plan to use Amada to address financial issues didn’t go well: Amada took longer to build than predicted and cost Garces an extra $1.3 million in construction costs.

And despite his celeb chef status — Food Network cred doesn’t always translate in NYC — the restaurant had trouble catching on. Amada made it just under two years before closing as a result of Garces’ increasing financial troubles.

So, in an attempt to further build his brand in New York, Garces opened Basque restaurant Ortzi in the Luma Hotel in Times Square in 2017. That restaurant never really caught on with critics either, and while it remains open, given the impending sale of Garces Group to Louisiana-based Ballard Brands, it’s a stretch to even consider Garces a one-hit-wonder in New York for either of his restaurants.

The downfall of the restaurant group has unfolded for the past year, with investors calling for a financial adviser to turn things around in 2017. Several lawsuits followed, and one of the nastiest involves an investor couple alleging Garces of running a “Ponzi scheme” with his restaurants. For the New York Amada, they allege they were promised a 20 percent return on their $700,000 contribution. Garces finally cracked under the pressure of multiple suits and financial struggles, officially entering bankruptcy. One of his NYC restaurants remains, but an NYC legacy does not.

Update: A representative confirms that Ortzi will remain open “with business as usual” under the new restaurant group.

• Jose Garces Sells His Restaurant Group, Enters Bankruptcy [ENY]
• ‘Iron Chef’ Jose Garces’ NYC Restaurant Was Part of Ponzi Scheme, Suit Says [ENY]