Jack’s Donuts of Indiana Commissary LLC filed for Chapter 11 bankruptcy on Wednesday in U.S. Bankruptcy Court for the Southern District of Indiana.
The filing reveals the commissary carries $14.2 million in liabilities against approximately $1.4 million in assets and lists more than 100 creditors. Two related entities—Marcum Industries and KCL Group—filed simultaneously.
According to Restaurant Business Online, the 64-year-old chain was founded in New Castle, Indiana, in 1961 and currently operates 24 locations, with 14 owned by independent franchisees. Despite the filing, the popular donut company stated on Facebook that stores remain open and operations will continue uninterrupted.
Newsweek reached out to Jack’s Donuts via email on Saturday for additional comment.
Why It Matters
The bankruptcy filing represents the culmination of months of mounting legal troubles for the company and its CEO Lee Marcum.
According to Indiana’s WRTV Investigates, by March, courts in Indiana and New York had already handed down $503,766 in judgments against Marcum and businesses connected to him.
Franchisees had grown increasingly alarmed—in January, owners representing 18 locations of Jack’s Donuts sent a letter to Marcum demanding his resignation, citing “ongoing mismanagement, coupled with troubling financial actions” and accusing him of “misappropriation of company funds, financial mismanagement, and the creation of multiple entities for personal financial gain.”
What To Know
Old National Bank filed a lawsuit in February accusing Marcum and Jack’s Donuts of Indiana Commissary of defaulting on business loans, seeking $3.4 million and threatening to foreclose on the New Castle store and Marcum’s home. Specialty Fitters, an Ohio company that installs mechanical piping services, won a $104,995.80 judgment in January after alleging they performed work at the New Castle production facility but were not fully paid. Investment funding firms filed multiple lawsuits between November 2024 and February 2025, with judgments totaling approximately $399,770, according to WRTV.
The bankruptcy filing lists more than 100 creditors, including trucking company Carter Logistics, which filed a lawsuit alleging it was not paid for donut deliveries, and Old National Bank, which holds a $3.5 million judgment. Former franchisee Angi Bone is listed as a creditor with a $40,000 claim after operating Jack’s Donuts locations in Fishers and Gas City. Bone has since renamed her business Boomtown Donuts.
Critically, the bankruptcy filing applies only to the corporate commissary and related entities—not individual franchise locations. The company stated on Facebook this week that “no independently owned franchisee is subject to this action,” and franchisees like Donna and Paul Ganote, who operate six Jack’s Donuts locations across central Indiana, remain legally separate from the bankruptcy proceedings. The company emphasized that “for more than 60 years, Jack’s Donuts has been about more than donuts — it’s been about people,” and stressed its commitment to continued operations throughout the court process.
According to WRTV Investigates, the Indiana Secretary of State’s Securities commissioner issued a cease-and-desist order to Marcum aimed at preventing him from offering and selling securities to investors. The order alleges that in June 2024, Marcum and his businesses unlawfully offered an unregistered security to Investor MD, and in September 2024, they unlawfully offered and sold an unregistered security to Investor AB.
What People Are Saying
Jack’s Donuts Team Facebook statement on October 30: “You may have seen that Jack’s Donuts has filed for Chapter 11 bankruptcy protection. This is a court-supervised process. We have plans for continued and uninterrupted future operations that will be filed in the case. Our stores remain open, our teams are at work, and our commitment to quality, tradition, and community remains unchanged.”
“The Jack’s franchisor and certain related entities are the subject of the bankruptcy proceedings, and no independently owned franchisee is subject to this action. For more than 60 years, Jack’s Donuts has been about more than donuts — it’s been about people. As we move through this process, our focus is the same: to ensure that the Jack’s experience continues for generations to come. Thank you for your continued loyalty and support.”
Franchisee owners representing 18 locations in a January letter to CEO Lee Marcum: “The ongoing mismanagement, coupled with troubling financial actions, has not only directly impacted our operations but has also led to a broader loss of confidence in the company’s future. Over the past 18 months, we have seen a noticeable decline in sales, revenue, and customer loyalty. We strongly believe that these issues stem from your leadership decisions, which have included misappropriation of company funds, financial mismanagement, and the creation of multiple entities for personal financial gain.”
What Happens Next?
Jack’s Donuts will proceed through Chapter 11 court proceedings, with management required to file a reorganization plan outlining how the company intends to restructure operations and address liabilities.