Oakland’s Black-Owned Coffee Chain Files for Bankruptcy

Red Bay Coffee Roasters has officially filed for Chapter 11 bankruptcy. The black-owned coffee chain in Oakland will begin the method as the corporate faces multiple lawsuits.

he informed that Red Bay filed in late August. The well-known franchise, which boasts five stores within the Bay Area, said the impact of Covid-19 and ongoing lawsuits played a significant role. In particular, the documents noted the “rising costs and associated uncertainties” surrounding the lawsuits as a push for Chapter 11 protection.

Owner and current debtor in possession, Keba Konte, began Red Bay in his garage in 2014. In his first-day filings statement on September 5, Konte listed his assets at $251,000. He also listed his liabilities at $3.3 million, with two loans valued at $550,000 each. On the opposite hand, the corporate reported a net lack of greater than $850,000 for the six months to January 2024.

Through her expansion, Konte has positioned the space as unapologetically Black and Brown-friendly, hosting panels and workshops to uplift the community. Red Bay has also showcased exclusive coffee blends that shine a lightweight on social issues, with a recent one dedicated to the conflict within the Democratic Republic of Congo and sickle cell awareness. But lawsuits accusing employees of sexual harassment and wage theft have stalled the corporate’s growth.

In 2018, a former worker sued Red Bay, alleging that several coworkers sexually harassed him. The worker also claims that he was demoted after which fired in retaliation. He also accused the corporate of failing to pay him the total amount of wages he was owed.

The former owner also filed one other lawsuit against Red Bay. The lawsuit claims that the franchise breached a contract for one in all its now-defunct Southern California locations. To add to their legal woes, the lawsuit also claims that the Equal Employment Opportunity Commission (EEOC) has opened an investigation into their business practices based on claims made by a former worker. The EEOC has not yet confirmed the investigation as a matter of federal policy.

With the Oakland-based chain filing for bankruptcy, the longer term of the chain’s five operating stores stays uncertain.