Oakland-based black-owned coffee chain files for bankruptcy amid multiple lawsuits

Red Bay Coffee Roasters has officially filed for Chapter 11 bankruptcy. The black-owned Oakland coffee chain will begin the process as more lawsuits against the company unfold.

San Francisco Business Times reported that Red Bay filed in late August. The high-profile franchise, which has five stores in the Bay Area, said the impact of Covid-19 and ongoing lawsuits played the biggest roles. Specifically, the filings cited the “spiraling costs and related uncertainties” surrounding the lawsuits as a push toward Chapter 11 protection.

The owner and current debtor-in-possession, Keba Konte, founded Red Bay in his garage in 2014. In his statement for first-day motions filed Sept. 5, Konte released his asset valuation at $251,000. He also listed his debts at $3.3 million, with two loans valued at $550,000 each. On the other hand, the company had a net loss of more than $850,000 in the six-month period beginning in January 2024.

Through its expansion, Konte has called the space unapologetically black and brown, hosting panels and workshops to uplift its local community. Red Bay also featured exclusive coffee blends that shed light on social causes, most recently one dedicated to the conflict in the Democratic Republic of Congo, as well as awareness of sickle cell disease. However, lawsuits accusing employees of sexual harassment and wage theft have hampered the company.

In 2018, a former employee sued Red Bay, alleging that several co-workers engaged in sexual harassment against them. The employee further claims they were demoted and then fired in retaliation. Moreover, they accused the business of not paying the full amount of wages owed.

A former owner also filed another lawsuit against Red Bay. The filing indicated the franchise breached a contract regarding one of its now-defunct locations in Southern California. To add to their legal woes, the filing also claimed that the Equal Employment Opportunity Commission (EEOC) launched an investigation into their business practices based on claims made by a former employee. The EEOC has not yet confirmed the investigation, given federal policies.

As the Oakland chain enters bankruptcy, the future of its five operating storefronts remains in limbo.

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