Foxtrot Market and Dom's Kitchen file for Chapter 7 bankruptcy

CHICAGO (CBS) — Less than a month after suddenly closing their stores, Foxtrot Market and Dom's Kitchen & Market filed for Chapter 7 bankruptcy, according to documents filed in Delaware bankruptcy court. 

Under the Chapter 7 bankruptcy filing, the parent company Outfox Hospitality reported its estimated number of creditors between 5,000 and 10,000. The filing listed the company's estimated assets between $10 million and $50 million and reported estimated liabilities in the same range. 

Under Chapter 7 bankruptcy filing, a company closes and sells off assets to pay creditors, compared with Chapter 11, which allows a company to reorganize while devising a plan to pay off its debts.  

Outfox Hospitality's board approved the decision to file for Chapter 7 bankruptcy during a meeting held on April 23. 

Dom's Kitchen & Market and Foxtrot Market suddenly closed their stores on April 23, six months after the chains announced a merger.

That included Dom's Chicago locations and all 33 Foxtrot stores in Chicago, Texas, and the Washington, D.C. area.

Following the grocery stores' abrupt closures, former workers at both stores sued the parent company, accusing management of failing to give employees the required notice of layoffs or proper severance pay.

The federal lawsuit filed in Chicago claims Outfox Hospitality violated federal and state Worker Adjustment and Retraining Notification Acts when it abruptly closed its stores and laid off workers without warning.

Both laws require employers to provide at least 60 days' notice before mass layoffs. The lawsuit, which asks for class-action status for all Dom's and Foxtrot employees, seeks 60 days of severance pay and benefits for laid-off workers.

Delivery was halted, mobile apps went dark, and store credit cards were cut off. All Foxtrot and Dom's account credits and member perks were voided.