Vancouver's Donnelly Group of bars and restaurants files for creditor protection

Prominent Vancouver pub and restaurant management company Donnelly Group has announced it is seeking creditor protection.

In a news release, the company calls the move to initiate proceedings under the Companies Creditors Arrangement Act (CCAA) "strategic," citing the impacts of the global pandemic as the reason.

The company owns 11 establishments in Vancouver, including the Lamplighter Pub in Gastown and Bomber Brewing craft brewery. It also owns three pubs in Toronto and three barbershops under the Barber & Co brand.

"Despite the often startling perception of this filing, it's very much a constructive versus destructive financial tool that will first bring added stability and then growth to our businesses operating in the embattled hospitality industry," said CEO Jeff Donnelly.

Jeff Guignard, executive director of the Alliance of Beverage Licensees of B.C., said the sector, in general, is struggling with inflation, a labour shortage, and having to pay back loans taken out during the pandemic. 

"From an industry perspective, about half of the overall hospitality industry is either losing money or barely breaking even right now," said Guignard. "When you hear of any particular place applying for creditor protection or going into bankruptcy proceedings, it's just a sad comment on how difficult it is to run a hospitality business right now."

Donnelly Group used to have a much bigger footprint in Vancouver but has divested itself of a number of locations in the past years.

The company gained profile in 2017 when it took over the former site of the Railway Club, a beloved live music venue on Dunsmuir Street.

In the news release, Donnelly Group said it will continue to operate all locations while maintaining employees and supplier relationships during the CCAA process. 

"Recognizing the need to navigate these difficult times and safeguard the well-being of its employees, the company aims to continue working cooperatively with its lender to revise the terms of existing loans, restructure the debt that was required to survive the pandemic and emerge as a more robust organization," said the news release.