Taylor Chip, LLC filed for chapter 11 Subchapter V bankruptcy protection in the U.S. Bankruptcy Court for the Eastern District of Pennsylvania on February 12, 2026 (Case No. 26-10550). The Lancaster County cookie company, founded in 2018 by husband-and-wife team Doug and Sara Taylor, listed $2.6 million in liabilities against $387,000 in assets after a failed expansion into Philadelphia left the business unable to service its loans. Originally filed as a reorganization, the case shifted toward dismissal in early April 2026 when the company announced it would close all remaining locations and shut down its online store by April 11, arguing that "rehabilitation is not feasible."
Once open, the Philadelphia stores never met revenue expectations. Despite adding two new locations, company-wide revenue fell 6% in the year before filing. Co-founder Doug Taylor described a "financial downward spiral" that began with the Philadelphia stores: "We just couldn't pay our loan."
Both Philadelphia locations closed without public notice in approximately the first week of February 2026, after operating less than 17 months combined.
The Abandoned $15.1 Million Creamery
In September 2024, the Shapiro Administration announced $3.5 million in state funding to support a new 25,000-square-foot manufacturing facility at 1780 Columbia Avenue in West Hempfield Township, Lancaster County. The total project cost was $15.1 million. The state commitment included a $2.625 million PIDA loan and a $470,076 extension of a Pennsylvania Dairy Investment Program grant originally awarded in 2019. The facility was expected to create 35 new full-time jobs and expand the company into ice cream production using locally sourced dairy.
Secured claims: $2.25 million. The filing lists $2.25 million in secured claims from three SBA loans and one bank loan, all secured by the company's accounts, equipment, fixtures, and inventory. The single largest obligation is a $1.9 million SBA 7A loan through NewTek Bank issued in June 2025. The SBA's total exposure across all three federal loans exceeds $1.8 million, accounting for more than 70% of total liabilities. The company's earlier pandemic-era loans included a PPP loan and a $45,000 EIDL loan paid off by March 2021.
Unsecured claims: $342,000. The unsecured creditor list totals $342,000 and includes over $134,000 in credit card debt, $55,000 owed to food delivery company DoorDash, and $49,000 in legal fees.
On March 3, 2026, NewTek Bank filed an objection to Taylor Chip's plan to use $112,000 in cash collateral that secured its loans. NewTek argued the company's reorganization plan was "wholly speculative" and lacked a reasonable chance of success.
Is Taylor Chip still open?
No. Taylor Chip announced in early April 2026 that it is closing all remaining locations. The York store closed April 5, and the Hershey, Manheim Pike, and online store close April 11, 2026. A motion to dismiss the bankruptcy case has been filed.
How much debt does Taylor Chip have?
The bankruptcy schedules list $2.6 million in total liabilities, including $2.25 million in secured claims (primarily SBA loans through NewTek Bank) and $342,000 in unsecured claims. The company has just $387,000 in assets, and the founders emptied their personal savings and took out a $100,000 home equity line of credit.
Who owns Taylor Chip?
Husband-and-wife co-founders Doug Taylor and Sara Taylor. Sara was named to the Forbes 30 Under 30 list for Food & Drink in 2024.
Why did Taylor Chip file for bankruptcy?
A failed expansion into Philadelphia, where permit delays stretched a planned six-month buildout to nearly two years. The stores generated ongoing expenses — including $8,750/month in rent at Chestnut Street alone — without revenue. A $1.9 million SBA loan taken in June 2025 to keep the company afloat became the single largest debt. A Facebook hack, failed holiday orders, and continued sales declines compounded the crisis.
Who is Taylor Chip's largest creditor?
NewTek Bank, which holds a $1.9 million SBA 7A loan issued in June 2025. NewTek objected to the company's use of cash collateral in March 2026, calling the reorganization plan "wholly speculative."
What happened to the $15 million creamery?
The Taylors planned a 25,000-square-foot manufacturing facility in West Hempfield Township with $3.5 million in state funding. They abandoned the project in spring 2024 after spending hundreds of thousands on development, citing rising construction costs. The state funds were never disbursed.
filed for chapter 11 Subchapter V bankruptcy protection https://whatnow.com/news/trending/popular-northeastern-us-cookie-brand-files-for-chapter-11-bankruptcy/
$2.6 million in liabilities against $387,000 in assets https://lancasteronline.com/business/local_business/taylor-chip-reports-federal-loan-as-biggest-chunk-of-debt-in-bankruptcy-filing/article_bcf9007b-ff40-4c90-867a-7a39d1fbdc07.html
close all remaining locations https://www.yahoo.com/news/articles/taylor-chip-closing-locations-bankruptcy-155010299.html
"rehabilitation is not feasible." https://lancasteronline.com/business/local_business/taylor-chip-to-close-remaining-locations-amid-sales-decline-following-bankruptcy-filing/article_4457f92e-8dc9-4eb8-98a1-338098f820f5.html
opened their first cookie stand in August 2018 https://local21news.com/news/local/taylor-chip-to-close-all-locations-online-store-after-bankruptcy-filing-cookie-company-doug-sara-taylor-hershey-york-lancaster-intercourse-business
no outside investors and a maxed-out credit card https://finance.yahoo.com/news/beloved-pennsylvania-cookie-company-files-213543740.html
hitting $100,000 per month in sales https://www.sba.gov/success-story/taylor-chip-finds-sweet-success-sbas-technical-pandemic-assistance-programs
No. 285 on the Inc. 5000 https://www.bakeryandsnacks.com/Article/2024/11/20/Taylor-Chip-s-rise-from-side-hustle-to-25m-dessert-brand/
Forbes 30 Under 30 list for Food & Drink in 2024 https://local21news.com/news/proudly-pennsylvanian/lancaster-native-makes-forbes-30-under-30-list-taylor-chip-chocolate-cookie-food-beverage-business-christmas-holiday-gift-present-lancaster-pennsylvania
Manheim Pike in Lancaster https://lancasteronline.com/business/local_business/lancaster-based-taylor-chip-plans-bankruptcy-reorganization-after-closing-2-philadelphia-stores/article_cd3fa922-8f1d-471a-98ee-e0ce529d8db8.html
23 Center Street in Gordonville https://www.paeats.org/feature/taylor-chip-the-perfect-dough/
York location at the Firehouse Shoppes https://www.yahoo.com/news/articles/taylor-chip-closing-stores-including-184613382.html
another at 1828 Frankford Avenue in Fishtown https://www.phillyvoice.com/taylor-chip-cookies-philadelphia-rittenhouse-fishtown/
November 16, 2024 https://metrophiladelphia.com/stories/taylor-chip-has-officially-arrived-with-plenty-of-sweet-treats,100986
January 2025 https://www.phillyvoice.com/taylor-chip-cookies-philly-closed/
announced $3.5 million in state funding https://dced.pa.gov/newsroom/shapiro-administration-invests-3-5-million-to-support-expansion-of-lancaster-county-cookie-company-taylor-chip-growing-pennsylvanias-ag-sector/
25,000-square-foot manufacturing facility at 1780 Columbia Avenue https://www.cpbj.com/lancaster-company-receives-3-5m-investment-from-shapiro-administration/
$1.8 million https://local21news.com/news/local/two-and-a-half-million-dollars-debt-taylor-chip-company-cookies-bankruptcy-lancaster-county-pennsylvania
$100,000 home equity line of credit https://www.yahoo.com/news/articles/cookie-shop-taylor-chip-close-160241181.html
"Building something from nothing means taking risks." https://www.fox43.com/article/news/local/lancaster-county/taylor-chip-cookie-shop-close-locations-filing-bankruptcy/521-a47b4dd3-b581-42f8-8085-bb461d4377fe
This article was researched and written with AI assistance, using court filings, public records, and news sources. AI-generated content can contain errors. Verify all information against primary sources before relying on it. This is not legal or financial advice. See the disclaimer.