A once-popular fast-food chain that has already shuttered most of its locations may be heading for a complete shutdown. The company is awaiting a key decision that could determine whether it restructures or files for Chapter 7 bankruptcy, which would lead to liquidation and the closure of its remaining restaurants.
Once a company files Chapter 11 bankruptcy, it gives up control of its future, and one popular fast-food fried chicken chain has learned that doing that puts its very survival at risk.
The second a bankruptcy court judge accepts a company's Chapter 11 filing, the court then retains the ultimate say. That means that a judge could accept or reject the company's plans.
It's not unprecedented for a company to be liquidated because the bankruptcy court believes that's the best plan for vendors, landlords, and employees owed money. In many cases, even when a bankruptcy judge accepts a plan to emerge from Chapter 11 bankruptcy, it comes with strings attached.
That's what's happening in the case of Sticky's, formerly Sticky's Finger Joint. The popular fast-food fried chicken chain filed for Chapter 11 bankruptcy over a year ago and has since closed most of its locations
The chain has a plan, and a financial backer, to emerge from Chapter 11 bankruptcy, but the plan has only been tentatively accepted by the Delaware bankruptcy court.
If the chain can't get a more formal plan agreed upon and approved, the judge has made it clear that it will force the chain into Chapter 7 bankruptcy.
Sticky's fried chicken chain fights for survival
Sticky's has been on the edge of the end, being forced into a Chapter 7 bankruptcy liquidation for months. The once 12-location chain has closed many of its stores and has been operating with the threat of closure hanging over it.
A June court hearing denied the company permission to sell itself for $2 million to Harker Palmer, an investment firm.
"The money we invest is our money. Which means we can work with founders to build value for the long-term without the need to think about 'exits' or 'timelines.' We can make choices based on our commitment to sound business strategy and maximizing long-term value," the investment company shared on its website.
In June, the bankruptcy court did stop short of forcing the company into a Chapter 7 bankruptcy liquidation. Instead, it gave the company more time to make a deal with its debt-holders, and in July, a deal was tentatively approved.
More Bankruptcy:
Where Sticky's fried chicken stands now
- A June 6 hearing to decide on the revised plan took place as scheduled.
- As of June 10, 2025, a Bloomberg report confirmed the court refused modifications that would reduce administrative claim payments mandating full payment unless creditors agreed otherwise.
- In July 2025, a court ruling granted tentative approval for a $2 million asset sale and allowed Stickys to continue operating under Chapter 11, delaying Chapter 7 liquidation for now.
Sticky's still has work to do
Under the specific type of Chapter 11 bankruptcy Sticky's filed, it has to pay off its vendors, landlord, and other claims in order to emerge from the proceedings. The July court decision allowed it to pay off US Foods, an essential vendor, but it still has to make deals with other creditors.
When it's not in court battling to avoid Chapter 7 bankruptcy liquidation, Sticky's has a fairly simple mission.
"Stickys was created out of a love for chicken fingers and the desire to think outside of the box. Our founders realized that there were a lot of New Yorkers who really loved chicken fingers but didnt have a great place to get them; and thus, Stickys was born! Our mission is to create the best damn experience through the comfort of chicken fingers in a fun, inclusive space," it shared on its website.
The chain has formally closed three locations and one ghost kitchen, although it's unclear if more have, or will be, closed.
Harker Palmer is a hands-on investor.
"We aren't entrepreneurs, but we have spent our career backing those who are. Our job is to support entrepreneurs...whatever that takes. We may help formulate strategy, recruit management talent, access industry connections, raise growth capital....or just be someone to talk to. We are never afraid to roll up our sleeves and support the goal of sustained, quality growth," the investment firm posted.
If Sticky's is forced into Chapter 7 Bankruptcy, heres what happens:
- A court-appointed trustee sells the companys assets
- Remaining stores are closed permanently
- Customers may not be able to use gift cards
- Employees are typically laid off without severance
