Encanto Restaurants staff still unpaid after Chapter 11 filing and KFC, Taco Bell closures
Former staff of Encanto Restaurants, Inc. of San Juan, which ran every KFC and Taco Bell in Puerto Rico until they shut on 2 November, say their final week's pay has not arrived. The company entered Chapter 11 bankruptcy on 5 November, and between 2,600 and 3,000 people have lost work.
Workers had expected the deposit for their last week on the morning of Monday 9 November. A woman who worked at a Taco Bell in Dorado told The Weekly Journal the money still had not come by the time the paper went to press on 10 November, and the pay stubs that usually appear on the ADP payroll platform before a deposit were missing too. She said she still expects to be paid for accrued vacation. Some colleagues could not claim unemployment benefits because the Department of Labor and Human Resources (DTRH) had no record of them as Encanto employees, she added.
The DTRH said it would look into complaints about unpaid wages, accrued leave and other possible breaches. On 5 November the department, led by Labor Secretary María del Pilar Vélez Casanova, said it was also checking whether staff were owed 60 days' notice, and that it would represent workers in claims if it found the law was broken, The San Juan Daily Star reported. The Child Support Administration (ASUME) has found 24 active cases involving former Encanto staff, 17 of them in arrears. Its administrator said it has not established whether pay deductions went unremitted, and it will ask to meet Encanto's human resources staff this week.
Encanto's voluntary petition (case 26-05345) lists about US$123.9 million in liabilities and US$29.8 million in assets, according to WhatNow's summary of the filing, which also says unsecured creditors should expect nothing once administrative costs are covered. NotiCel reported that Banco Popular de Puerto Rico, owed on a US$85 million loan, is the largest creditor. The company's IHOP restaurants are not part of the case.
Judge María de los Ángeles González has set a first conference for 22 January 2027 at 9:30am, where Encanto's lawyers must explain the filing and give a timetable for a reorganisation plan. Yum! Brands has said KFC and Taco Bell are seeking a new franchise partner. None of the reports carries a statement from Encanto on when the final wages will be paid.
Why it matters: Between 2,600 and 3,000 former Encanto workers are waiting for their last week's pay in a case where the filing says unsecured creditors may get nothing. The court's first conference on the case is on 22 January 2027.
If this affects you
- Encanto Restaurants, Inc.'s Chapter 11 case, No. 26-05345, is before the US Bankruptcy Court for the District of Puerto Rico, which gives case information by phone, by mail and through PACER. prb.uscourts.gov
- The US Bankruptcy Court for the District of Puerto Rico accepts creditors' proofs of claim online through its electronic proof of claim (ePOC) service. prb.uscourts.gov
- Puerto Rico's Department of Labor and Human Resources pays regular unemployment benefits of up to US$240 a week for up to 26 weeks, with claims made through its Desempleo Digital platform. trabajo.pr.gov
Sources
- Labor Dept. launches probe into Encanto Restaurants layoffsThe San Juan Daily Star, Nov 6
- A Major Restaurant Operator Behind KFC, Taco Bell and More, With Around 180 Restaurants, Files for Chapter 11 BankruptcyWhatNow, Nov 6
- Encanto Restaurants se declara en quiebraNotiCel, Nov 6
- Former employees of Encantos Restaurants have not been paid for their final week of workThe Weekly Journal, Nov 10