Frinj Coffee Declares Bankruptcy to Restructure

Pioneering Santa Barbara Coffee Growing and Roasting Company Files for Chapter 11; Also Being Sued by Investor-Employee

Credit: Courtesy

The Santa Barbara–rooted dream of growing a world-class coffee-farming industry in Southern California may not be over, but it’s certainly facing a financial nightmare right now.

In January, Frinj Coffee — which was founded by Goleta farmer Jay Ruskey in 2017 and enlisted more than 70 farms across the state to grow beans — filed for Chapter 11 bankruptcy, claiming about $215,000 in assets while listing more than $1.8 million in liabilities.

Frinj Coffee founder Jay Ruskey | Credit: Macduff Everton

Additionally, the company’s former head roaster, Paige Gesualdo, is suing the company as well as Ruskey and two more executives for fraud, breach of contract, and various employment-related claims. “In view of the pending litigation, we don’t have a comment at this time, but direct you to our publicly filed pleadings,” explained her attorney, Andrew Shadoff.

Those documents show that, prior to and while being employed by Frinj, Gesualdo invested $1.2 million into the company. The lawsuit claims that, in order to attract her investment, Ruskey and his executives intentionally misled Gesualdo about the company’s finances. Her father, Ralph Gesualdo, also loaned the company $200,000, and has filed a second lawsuit over that unpaid promissory note.

Ralph Gesualdo’s lawsuit was filed in August 2023, while Paige Gesualdo’s suit followed on December 1. Frinj then filed for Chapter 11 on January 17.

Ruskey, who was the subject of a feature in the Los Angeles Times a month after the bankruptcy was filed, is adamant that this is just a change, not the end, for Frinj.

“As a small business deeply rooted in innovation and community, the emotional stakes are high, and relationships among stakeholders are profoundly personal — akin to a family,” said Ruskey in a statement. “Often, that can result in challenges which look more like a family dispute than a corporate issue. Frinj opted for a strategic semi-pause, seeking protection through reorganization to address these matters comprehensively and fairly.”

He continued, “This step represents not an end, as the company is still selling coffee, trees, and helping farmers, but a necessary interlude, and we are optimistic that we will return to putting our full focus on pioneering California coffee very soon. In the meanwhile we hope our family friends will give us the time and space to do so, as no one likes to air their family disputes in public.”

There is talk of more investor-related lawsuits on the horizon, but other farmers are sticking with Frinj to keep the California coffee dream alive. That includes Frinj’s biggest partner, Hobson Family Farms, which planted the state’s largest coffee orchard down in Ventura County.

“Creating a whole new market for anything is daunting, but doing it with all of the challenges of a value-added agricultural product makes it exponentially more challenging,” said Hobson’s CEO David Armstrong, who will oversee the farm’s first harvest this year. “When we planted, we knew Frinj was a start-up and prepared contingency plans in case something happened.” He’s working with Ruskey on both the restructuring and the development of a post-harvest facility in Ventura.

“Jay has proven that he is the one who can make California a player in the international specialty coffee market, and we can’t wait to see the reactions with our first cupping,” said Armstrong. “We’ve been focused on trying to grow the best coffee in the world.”