A 64-year-old Indiana donut chain has landed in federal bankruptcy court. Jack’s Donuts, founded in New Castle in 1961, filed for Donut Chain Files Chapter 11 reorganization on October 24, 2025.
The parent company reported $14.2 million in liabilities against just $1.4 million in assets. Our analysis suggests this franchise bankruptcy puts a beloved regional brand at a real crossroads.
Key Takeaways
- Jack’s Donuts filed Chapter 11 (Case #25-773353) in the Southern District of Indiana.
- The filing names 100+ creditors, including a $2.9M Old National Bank foreclosure action.
- All 24 store locations stay open, and independent franchisees are not part of the case.
The Filing At A Glance
Here is the snapshot, pulled straight from court records you can review through the U.S. Courts bankruptcy portal. We kept it tight so you can scan it in seconds.
| Detail | Information |
|---|---|
| Company | Jack’s Donuts of Indiana Commissary, LLC |
| Filing Date | October 24, 2025 |
| Case Number | 25-773353 |
| Court | U.S. Bankruptcy Court, Southern District of Indiana |
| Chapter | 11 (Subchapter V) |
| Judge | James M. Carr |
| Status | Active, voluntary petition |
This is a small business reorganization, not a liquidation.
If you have followed restaurant chain collapse news this year, the structure won’t surprise you.
Where The Money Stands
The gap between what the company owns and what it owes tells the story fast.
Per the Securities and Exchange Commission’s bankruptcy guidance, Chapter 11 lets a business restructure under court supervision.
| Financial Metric | Amount |
|---|---|
| Total Liabilities | $14.2 million |
| Total Assets | ~$1.4 million |
| Estimated Creditors | 100+ |
| Store Locations | 24 |
| Franchisees | 14 |
Our team observed that the debt-to-asset ratio here is steep.
That imbalance is exactly what qualified the brand for Chapter 11 reorganization, according to the Administrative Office of the U.S. Courts.
We cover similar franchise bankruptcy filings regularly, and the warning signs often look alike.
Who The Company Owes
The Donut Chain Files Chapter 11 creditor list reads like a roster of suppliers, lenders, and the state.
| Creditor | Claim Type |
|---|---|
| Old National Bank | Secured loan, $2.9M (foreclosure) |
| First Merchants Bank | Equipment financing |
| U.S. Small Business Administration | EIDL loan |
| Prairie Farms Dairy | Supplier claim |
| Carter Logistics | Unpaid delivery invoices |
| Indiana Department of Revenue | Tax claim |
If you have read our coverage of debt restructuring cases, secured lenders like banks usually sit first in line.
The Legal Pile-Up
Court judgments stacked up across 2025 before the filing.
Industry insiders are noting that the legal pressure arrived well before the bankruptcy.
| Claimant | Judgment / Action |
|---|---|
| Specialty Fitters (Ohio) | $104,995.80 |
| Avanza Capital Holdings | $292,768 |
| Amerifi Capital | $61,888 |
| Spartan Business Solutions | $44,113.97 |
| Indiana Secretary of State | Cease-and-desist (securities) |
Total judgments topped $503,000, plus the $2.9M foreclosure.
We track Indiana business news closely, and this volume of claims is unusual for a regional bakery.
What Went Wrong
The Donut Chain Files Chapter 11 trouble traces back to commissary operations launched in October 2023. CEO Lee Marcum asked franchisees to stop baking in-store and buy from the central facility.
Many sold their equipment and laid off bakers as a result.
- Customers compared the new product to “gas station donuts.”
- Franchisees reported lost sales and weaker loyalty.
- Operators sent a letter calling for Marcum to resign, citing financial mismanagement.
These allegations remain claims in court filings, and you can follow updates through PACER court records.
Fat Brands, Inc Court Approves Sale of Assets in Chapter 11 Bankruptcy Proceedings
Fat Brands gets court approval to sell assets in Chapter 11 case; FBG Bid Co. is successful bidder, DC Restaurant Group is backup for Round Table Pizza assets at $44M.https://t.co/ebAbKoR2VE
— S@M (@notdumbmoney) June 18, 2026What Happens Next
The company says stores remain open and operations continue. Independent franchisees are not part of this donut chain Chapter 11 action. A Subchapter V trustee will oversee the debt restructuring plan.
We will keep following this case as the reorganization unfolds.
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