https://www.bizjournals.com/philadelphi ... arket.html?
THE BUSINESS JOURNALS
BANKING & FINANCIAL SERVICES
Meridian Bank plans to foreclose on Boston Market restaurants used as collateral for $8.6M loan
Boston Market operates more than 300 restaurants across the U.S.
Enlarge
Boston Market operates more than 300 restaurants across the U.S.
PROVIDED BY BOSTON MARKET
By Emma Dooling
Reporter, Philadelphia Business Journal
Jun 27, 2023
Listen to this article 4 min
Meridian Bank has filed a complaint against Boston Market Corp. after the fast-casual restaurant chain allegedly defaulted on an $8.6 million loan originated with the Malvern-headquartered bank in 2021.
The lender is seeking $3.08 million plus interest, additional costs and attorneys' fees. The roughly $3 million total is the remaining amount that's needed to settle the loan after Meridian used funds in an account Boston Market had with the bank to pay off part of the balance.
Meridian Bank filed the complaint in confession of judgment on May 15 with the Chester County Court of Common Pleas. The bank was authorized to submit this type of complaint — which allows it to file a judgment against Boston Market without a hearing — in the case of default because of a clause in a promissory note issued by the borrower.
In addition to the bank account, Meridian also took Boston Market properties as collateral for the loan and plans to move forward with foreclosing on the properties if Boston Market does not repay the remaining amount, according to Meridian Bank CEO Chris Annas. He did not provide an exact number of properties or disclose where they are located.
Annas told the Business Journal that the company is trying to work with Boston Market to resolve the situation before resorting to a foreclosure action.
Chris Annas of Meridian Bank
Enlarge
Chris Annas of Meridian Bank
MERIDIAN BANK
Golden, Colorado-headquartered Boston Market has approximately 313 locations across 24 U.S. states and territories, including several throughout the Philadelphia region. The chain known for its rotisserie chicken was acquired by Engage Brands LLC, a part of the Rohan Group of Companies, in April 2020. The Rohan Group, owned by Bucks County businessman Jay Pandya, is a longtime operator of franchised restaurant concepts including Pizza Hut and Checker’s & Rally’s.
Pandya told the Business Journal that Boston Market plans to file a motion to vacate the judgment but did not comment further on the case.
According to the complaint filing, Meridian Bank granted Boston Market the $8.6 million loan in June 2021. The restaurant chain had obligations to reimburse Meridian for Meridian's payments made to U.S. Bank National Association on Boston Market's behalf. The payments were for draws made by Chubb Global Casualty Co. under an $8.6 million letter of credit issued by U.S. Bank for workman's compensation insurance policies that Boston Market held with Chubb, the filing says.
The letter of credit with U.S. Bank was set to expire on May 31, 2022, but automatically renewed for another year, according to the filing.
A promissory note issued by Boston Market to Meridian Bank when the loan was first granted in June 2021 stipulated that the loan's principal balance and all interest and fees accrued were payable upon the demand of the Chester County bank. In July 2022, the filing says Meridian requested that Boston Market repay the more than $65,000 it owed at that time, in accordance with the agreement.
Jay Pandya, owner of the Rohan Group of Companies, at his Bucks County office. Panya previously attempted to establish a U.S.-based professional cricket league
Enlarge
Jay Pandya, owner of the Rohan Group of Companies, at his Bucks County office. Panya previously attempted to establish a U.S.-based professional cricket league
JOHN GEORGE
According to the filing, when Boston Market did not make the payments, Meridian notified the company in September that the missed payments represented a default on the loan and gave the company 30 days to pay. The filing alleges Boston Market did not make the payment by the deadline. According to Annas, Boston Market still has not made any payments on the loan to Meridian.
As a result, Meridian chose not to renew the letter of credit beyond its May 31 expiration date this year. The filing says Meridian notified Chubb of the non-renewal, and Chubb drew on the remaining amount on May 2, bringing the total owed by Boston Market to the full $8.6 million.