The organization behind local restaurant and comfort food success story Al’s Burger Shack has filed for bankruptcy reorganization amid recent expansion efforts.

Three separate Chapter 11 bankruptcy forms were filed on behalf of Al’s Burger Shack according to the Triangle Business Journal, one for the Franklin Street location that listed assets of less than $50,000 on liabilities ranging between $500,000 and $1 million, and another two for the Southern Village and Governor’s Village restaurants with similar reported ratios.

Al’s released a prepared statement following the news:

“On Friday, Al’s Burger Shack filed for bankruptcy protection. While sales are strong at our three locations, we overextended during expansion and need protection and relief while we reorganize. We appreciate your support and patronage and will need to keep public comments on these proceedings to a minimum. As grateful as we were to have received accolades in recent years, we are even more so to have been afforded this opportunity to regroup. Rest assured we have absolutely no plans to stop slinging burgers and hope to see you at Al’s soon.”

Since opening its first location on Franklin Street in 2013, Al’s Burger Shack has become a local staple and was ranked as having the “best burger in America” by TripAdvisor in 2018.

In 2019, Al’s Pub Shack opened in Governor’s Village as a new concept, but it was later renamed to Al’s Burger Shack. Al Bowers also teamed up with Chapel Hill native Chris Baldwin to open the “upscale dive bar” 401 Main in Carrboro in September. Last week, it was announced that Al’s Burger Shack would be expanding into Beer Study in Durham.

Attorney John Paul H. Cournoyer of Northen Blue LLP — who filed the bankruptcy on behalf of Al’s Burger Shack — said the businesses obtained “high-interest loans” as part of its expansion, saying “The restaurants are strong businesses, and if it were not for these loans the companies would be healthy.”

This post will be updated with more information as it becomes available.

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