In the 2008 recession, Marathon, "like many businesses and restaurants, fell behind on its rent," according to papers filed in U.S. Bankruptcy Court in the Eastern District of Pennsylvania.
Initially, the landlord "cooperated with us" and the restaurant "paid a stipulated rent each month." In September 2012, the landlord waived 53 percent of the back rent and provided a schedule for payment, court papers said.
But, soon after, the ownership changed, and a promised written agreement outlining rent terms was never received, according to the bankruptcy filing.
"Last week the company learned that its landlord was not honoring the agreement it reached in fall 2012, but instead declared a default," the partnership that owns 1818 Market said in a statement. "This put the company in a precarious position."
The landlord's "threat to enter judgment and take possession of the lease premises" led the partners to reorganize under bankruptcy protection.
The company estimated it had "secured obligations" of about $2 million, and about $450,000 in "unsecured" debts.
The Borishes, who began 30 years ago with a 10-seat restaurant in Northeast Philadelphia, are majority shareholders with a 92 percent ownership interest. Their two sons each own 4 percent, court documents said.
"We still have the same drive and passion we did when it all began," Sheryl Borish said in court papers. "We take great pride in being part of Philadelphia's landscape and feel deeply rooted in our community."