The Farmacy faces backlash after filing for bankruptcy, allegedly leaving workers without pay

The Farmacy, a now-closed popular brunch spot in Nob Hill, is under fire for reportedly leaving its employees without pay after filing for bankruptcy last week.

In recent news reports and on social media, former employees of the restaurant alleged the owners closed the eatery without giving them notice or their final paychecks for the most recent pay period.

Court records show that Farmacy Coffee Shop LLC filed for Chapter 7 bankruptcy with the United States Bankruptcy Court for the District of New Mexico on Oct. 14.

The Journal could not reach the owners or their attorney for comment.

In a now-deleted statement posted to The Farmacy’s Facebook page on Monday, The Farmacy owner Jacob Elliot said the filing was an “emergency decision that had to be made.” The filing came in the middle of a payroll cycle, halting any final payments to employees, Elliot said.

Elliot said his attorneys notified him he could not issue checks to employees for the pay period leading up to the closure and that a court-assigned third party is now in control of the business, its assets and remaining compensation for employees.

“If it were up to us, we would have processed the final payroll cycle, and the employees would have been issued checks as per usual,” Elliot said in the statement. “But unfortunately, that is not legal protocol when it comes to bankruptcy court in the state of New Mexico.”

As for what led to the emergency bankruptcy, Elliot cited increased costs for goods and challenges in launching another business venture as contributing factors.

Elliot and his partner, Mary Hammack, moved to San Diego in 2020, two years after opening the Nob Hill restaurant, to be closer to family, he said. In 2023, the owners leased a property in downtown San Diego with the intention of opening a restaurant there. That restaurant, also called The Farmacy, opened over the summer, according to reporting by SanDiegoVille.

Elliot said a “severely mishandled” permitting process delayed the opening for two years and rapidly depleted the owners’ funds. Elliot said revenues at The Farmacy in Albuquerque also declined after the owners’ move to San Diego.

He called the bankruptcy a “difficult decision” that “had to be made much more abruptly than we would have hoped.”

The filing came one day before the owners announced the closure of the restaurant, located at 3718 Central SE, on social media last week.

Sophia Nuanez, a former employee of The Farmacy, said she and other employees didn’t hear the official word on the closure until they came across the announcement on social media, along with the rest of the public.

“I actually heard about it first from one of my friends,” Nuanez said. “So one of my coworkers went into our work app where we messaged with (Elliot) and everyone, and asked when we could pick up our final paycheck.”

Nuanez said Elliot told the group he tried to send a message informing them of the closure, but it didn’t go through. He then explained to staff that the business had filed for bankruptcy, did not have the ability to pay them and that someone would be in touch, Nuanez said.

“It was very upsetting,” Nuanez said. “Luckily, I’m one of the people (who) has a second job, so I’m not completely without a job at the moment. But now that I don’t have this one, I will be coming up short on bills.”

Nuanez said she and other employees filed wage claims with the New Mexico Department of Workforce Solutions in hopes of remedying the lack of compensation. The department has received six wage claims from former employees of The Farmacy, NMDWS spokesperson Stacy Johnston confirmed to the Journal.

Nuanez estimates roughly 15 employees were working at the restaurant when it closed.

The Farmacy’s bankruptcy filing and closure came amid a more-than-two-year legal battle with another group of former employees, who filed a wage theft lawsuit against the business in 2023.

Court documents show that five former employees of The Farmacy filed a civil complaint in 2nd Judicial District Court alleging the owners had violated the Albuquerque Minimum Wage Ordinance, which “prohibits the sharing of tips with employers and specifies that tips are the property of the tipped employee,” the complaint said.

The complaint stated that The Farmacy owners violated the ordinance by establishing a tip-pooling system in 2022 that shared servers’ tips with other employees, including the floor manager and kitchen workers.

In the complaint, the employees alleged that the business did not distribute the tips it pooled but rather kept “some or all” of the tips. It added that two of the employees were fired after allegedly notifying the business owners of the alleged illegal nature of the tip pooling.

That suit was ongoing and had a trial date scheduled for Monday, but on Thursday, the court granted a stay for the case as a result of the bankruptcy, canceling the trial date and halting all proceedings until further notice, court documents show.

Elliot addressed the lawsuit in his statement.

“After seeing the claims being brought against us, we felt very strongly that we had adequate evidence to disprove them and this is something that we still maintain,” Elliot said. “We believe that had we gone to trial, which we were actively preparing for, we likely would have had a favorable outcome.”

Elliot included the cost of long-term litigation as another factor that contributed to the bankruptcy and closure of The Farmacy in Albuquerque.

He also went on to say the business never unlawfully fired anyone.

The lengthy statement prompted fiery reactions from the Albuquerque community, with many expressing doubt in the owners’ side of the story and support for the unpaid employees.

Many even flocked to Google and Yelp to leave negative reviews on The Farmacy’s San Diego counterpart, prompting Yelp to post a notice stating, “This business is being monitored by Yelp’s Support team for content related to media reports.”

In his statement, Elliot encouraged the public to ask the owners for further clarity on the situation.

“We believe that any of the allegations or rumors that have so far been made about us or the business lack merit and proof, and we would hope that anyone seeing them would consider this when choosing where their opinion might fall on the matter,” Elliot said.

For Nuanez, the public’s passion on the matter hasn’t gone unnoticed.

“It’s been really nice to see that community support,” Nuanez said.