Viral cookie chain Chip City shuts down dozens of stores amid founder lawsuit

Chip City, the Instagram-fueled cookie brand that expanded from a Queens shop to a multi-state chain, appears to have halted operations at dozens of locations across New York City, New Jersey and Texas, with storefronts boarded up and police directing passersby away. Social-media videos show empty stores despite the website still listing them as open. The abrupt closures come days after co-founder and former CEO Peter Phillips filed a New York Supreme Court suit accusing the company and its controlling investor, Enlightened Hospitality Investments, of withholding wages, breaching contracts and pressuring him over more than $640,000 in SBA loans he personally guaranteed.

Phillips claims he was removed after demanding overdue pay and that his health benefits were cut. The company has not issued a public statement, and it remains unclear how remaining outlets will operate, leaving hundreds of employees jobless.