Oakland's well-known coffee roaster, Red Bay Coffee, has declared Chapter 11 bankruptcy amidst financial turmoil and multiple legal challenges. According to the San Francisco Business Journal, CEO Keba Konte cited the direct and lingering effects of the COVID-19 pandemic, spiraling costs, and related uncertainties due to ongoing lawsuits as the primary reasons for the financial restructuring.
The coffee chain, known for its quality products and inclusive community ethos, faces significant financial hardship. Its assets are listed at just over $251,000 against liabilities approximating $3.3 million. The filings detail a net loss of more than $850,000 from the beginning of the year through July, and the impact this may have on Red Bay's five Bay Area cafes remains uncertain, as per the San Francisco Business Journal.
Legal troubles include a sexual harassment lawsuit brought forth by former employee Ashley Stewart in 2018. According to court documents, Stewart alleged that she experienced sexual harassment by multiple coworkers and claimed that management, including Konte, failed to take action upon her reports. Stewart also accuses the company of remuneration issues and retaliatory dismissal. Red Bay Coffee and Konte have denied these allegations, responding to the suit in 2019 with a denial of wrongdoing.
In addition, Red Bay is confronted with a breach of contract claim by a former landlord at a Los Angeles location, which the company no longer operates out of, and an open investigation by the U.S. Equal Employment Opportunity Commission related to former employee claims. Despite reaching out to the Oakland office of the EEOC, Eater SF reports that the agency declined to comment, citing federal policies on confidentiality.
Red Bay Coffee, which marked its 10th anniversary this year, originated from humble beginnings in Konte’s garage in 2014 and expanded into a symbol of entrepreneurial spirit and cultural inclusivity in the community. Known for hosting events and workshops supporting entrepreneurs of color, the cafe chain's future and Konte's vision for spaces "unapologetically welcoming to Black and brown people," as he had previously told Eater SF, are now up in the air as the Chapter 11 process unfolds.
