Six of seven company-owned Spicy Pickle sandwich shops in Colorado closed abruptly Feb. 6 after the company defaulted on roughly $4.76 million in loans, according to SEC documents. Seven Spicy Pickle restaurants remain open in Colorado.

Assets of the seven closed stores — furnishings, fixtures and equipment — will be put up for auction at 10 a.m. Feb. 21 at the offices of Davis Graham & Stubbs in Denver so that the lenders can recover some of their losses from the defaulted loans.

Spicy Pickle said in its most recent quarterly filing that, as of Sept. 30, it operated 22 franchised and seven company-owned restaurants in nine states. Two locations, in Mississippi and Arizona, later closed. It listed 14 Colorado restaurants at that time.

The company also had 11 franchised and one company-owned BG Urban Café restaurants in Canada.

No one could be reached at the Denver Spicy Pickle headquarters at 90 Madison St. Monday morning. Its web site lists seven Colorado stores, which were all open and operating as of Monday. They are in Aurora, Boulder, Denver, Fort Collins, Greenwood Village and Lone Tree.

The stock price for the publicly traded company was listed as less than a penny per share on Monday.

When business partners Kevin Morrison and Tony Walker opened the first Pickle in August 1999 at 988 Lincoln St., they served gourmet sandwiches to lines that snaked out the door.

“When we opened on day one, our goal was to stay open till 9 p.m. We closed at 4 because we were out of bread,” Morrison said. “The line was out the door and it didn’t go away, it was crazy.”

The partners, who met in the kitchen of Barolo Grill, wanted to create quality sandwiches that were higher priced than the chain sub shops, but were made with top-notch ingredients such as Boar’s Head meats and cheeses, locally made bread and unusual spreads.

The company expanded to additional stores in 2001 with one on Colorado Boulevard in Denver and another in Lakewood. Marc Geman, an attorney who had successfully grown a mall-based pretzel stand company which he sold to Mrs. Fields, joined the Pickle to start franchising.

“We thought (Geman) would be able to duplicate that (pretzel stand) success with the Spicy Pickle,” Morrison said. As the company grew, Morrison said he was increasingly butting heads with Geman over the direction the Spicy Pickle was going.

The company went public in 2007, and Morrison stayed on as director of culinary and baking. Presley Reed became head of the board of directors, which soured Morrison’s relationship to the Pickle. Reed, along with his wife Patricia, are two of the company’s lenders, along with Raymond and Joan BonAnno who are all listed as lenders who are selling the assets.

Morrison parted company with Spicy Pickle nearly three years ago. He opened Pinche Tacos, a full service Mexican restaurant at 1514 York St. last year, as well as a mobile taco truck.

“I would rather grow on a smaller scale with people I completely love working with than grow some big monster and not enjoy it,” said Morrison, who said he lost track of Walker, his Spicy Pickle partner. “We have that philosophy with Pinche Tacos.”

Penny Parker: 303-954-5224 or pparker@denverpost.com