Doughnut Chain Chapter 11: Jack’s Donuts Bankruptcy Filing

For 64 years, Jack’s Donuts served up glazed rings and raised dough across the Midwest. Now the Indiana-based chain finds itself in the middle of a legal storm that has pushed it into bankruptcy court, with franchise owners watching their futures hang in the balance while the company works to restructure.

Company: Jack’s Donuts · Filing Date: October 29, 2025 · Age of Chain: 64 years · Bankruptcy Type: Chapter 11 · Headquarters: Indiana

The table below summarizes the key details from the bankruptcy filing and related legal actions.

What donut chain files Chapter 11?

Jack’s Donuts of Indiana Commissary LLC filed for Chapter 11 bankruptcy protection on October 29, 2025, in the U.S. Bankruptcy Court for the Southern District of Indiana, according to Bankruptcy Observer, which tracks court records from the federal filing system. The case number assigned was 25-06610-JJG-11, with Judge Jeffrey J. Graham presiding over the proceedings.

Details of the filing

The filing listed 139 creditors, making it a substantial bankruptcy case. Assets were reported between $1 million and $10 million, while liabilities ranged from $10 million to $50 million, according to court documents reviewed by WRTV. The company is headquartered at 2000 Troy Avenue in New Castle, Indiana.

Two related entities—Marcum Industries and KCL Group, both connected to CEO Lee Marcum—filed Chapter 11 on the same date, as reported by WRTV. Legal representation for the debtor comes from Jeffrey M. Hester of Hester Baker Krebs LLC in Indianapolis.

Reasons cited

The filing arrived after a turbulent period marked by multiple lawsuits and financial judgments. Franchise operators sent a letter alleging an 18-month sales decline attributed to leadership misappropriation, mismanagement, and the creation of multiple entities for personal gain, according to TheStreet. The chain also faced supply disruptions after shifting to centralized commissary production in 2023 from in-store baking, per Restaurant Business.

Eleven lawsuits appeared in the filing with judgments exceeding $1 million, including $783,157 awarded to Indiana trucking company Carter Logistics for unpaid deliveries, Restaurant Business reported. Half a dozen liens had been placed against company assets.

What legal problems has Jack’s Donuts faced?

Beyond the bankruptcy court, Jack’s Donuts and its CEO encountered regulatory scrutiny that added pressure to an already strained financial situation.

Ongoing lawsuits

Old National Bank emerged as the largest creditor, holding a $3.5 million judgment against the company, WRTV reported. The bank’s secured business loan was listed at $2.9 million, according to TheStreet.

Total judgments against the company reached approximately $503,000 in 2025, plus a $2.9 million bank foreclosure, TheStreet noted. Civil lawsuits and judgments had accumulated against CEO Lee Marcum and connected businesses in the months leading up to the filing.

Financial pressures

In May 2025, the Indiana Secretary of State cited CEO Jack Marcum for violating securities laws after selling unregistered securities to two investors in 2024, Restaurant Business reported. The state’s securities commissioner issued a cease-and-desist order prohibiting Marcum from offering or selling securities in Indiana.

“The document orders Marcum and his businesses to immediately cease and desist from engaging in any act that violates the Indiana Uniform Securities Act,” according to the Indiana Secretary of State’s office, as cited by WRTV.

Will Jack’s Donuts stores stay open?

The company has stated that the Chapter 11 filing aims to restructure debt while keeping franchisees operational. However, the situation for individual store owners remains precarious.

Company assurances

“The franchisor and commissary filed bankruptcy to restructure its debts while maintaining production for franchisees,” TheStreet reported. Franchisees who remain open despite the bankruptcy have continued operating, with some renting kitchen space or purchasing equipment to navigate supply disruptions.

Franchise impacts

The brand has franchisees that remain open despite the bankruptcy filing, Restaurant Business confirmed. Yet franchisees face genuine uncertainty as the parent company’s financial reorganization plays out in court.

“Franchisees at risk due to parent company bankruptcy,” TheStreet noted. Those operators who invested their savings and livelihoods in the Jack’s Donuts brand now find themselves caught between continuing operations and cutting losses.

What is the background of Jack’s Donuts?

Jack’s Donuts built its reputation over more than six decades, becoming a fixture in Indiana and surrounding states before the legal troubles brought it to bankruptcy court.

History and locations

Jack’s Donuts was founded in New Castle, Indiana in 1961, making it a 64-year-old regional chain by the time of the bankruptcy filing, Restaurant Business reported. The company operated from its headquarters at 2000 Troy Avenue in Henry County, Indiana.

In October 2023, Jack’s Donuts opened a production and distribution commissary in New Castle, a move that would later disrupt franchise operations when supply chains faltered, WRTV reported.

Menu offerings

The chain traditionally offered a range of donuts, kolaches, and related bakery items common to Midwest doughnut shops. The shift to commissary-based production in 2023 marked a significant operational change that affected product quality and consistency, according to franchise complaints.

How does this compare to other chain bankruptcies?

Restaurant chain bankruptcies have become more common in recent years, with Jack’s Donuts joining a list that includes high-profile cases like Red Lobster.

The Jack’s Donuts filing shares common features with other chain bankruptcies: creditor disputes, supply chain upheaval, and leadership missteps. Like Red Lobster’s Chapter 11 filing, which left franchise operators in limbo, Jack’s Donuts faces similar questions about whether the brand survives intact.

The key difference lies in scale and regional focus. Jack’s Donuts remains a smaller regional chain compared to national restaurant bankruptcies, yet the franchise model vulnerabilities are similar—individual operators bearing the cost of corporate decisions.

Quotes

“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.”

— Franchise operators, as reported by TheStreet

The document orders Marcum and his businesses to immediately cease and desist from engaging in any act that violates the Indiana Uniform Securities Act.

— Indiana Secretary of State’s Securities Commissioner, as cited by WRTV

Summary

Jack’s Donuts entered 2025 already bleeding from legal judgments and a regulatory cease-and-desist. The October Chapter 11 filing represents the company’s attempt to reorganize under court supervision while keeping franchise stores open. For franchise owners who poured their savings into the brand, the path forward remains murky—their stores stay open today, but the long-term question of who controls the chain and whether it can return to profitability hangs over proceedings that last saw court activity on March 22, 2026.

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Jack’s Donuts Chapter 11 filing reflects broader restaurant industry struggles, akin to the Red Lobster bankruptcy that shuttered locations nationwide.

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