mulberry factory store Asada files for bankruptcy
A judge earlier this week granted two motions on behalf of a Laguna Beach restaurant seeking bankruptcy protection. Bankruptcy Court in Santa Ana. Judge Erithe A. Smith approved the motions.
Filing for Chapter 11 will allow Asada, a Mexican steakhouse and tequila bar at 480 S. Coast Hwy., to remain open, said Jim Bastian, partner with the law firm Shulman Hodges + Bastian.
The restaurant moved forward with the bankruptcy process “to protect creditors, preserve the business, to preserve jobs and protect membership interest of [Scott] McIntosh [owner and part debtor of the ownership group],” according to the court filing.
The restaurant’s debtors are McIntosh, a restaurant industry veteran, and landlords and part owners Arthur and Sueko Fong of the Fong Trust.
MCF480, LLC, the umbrella company that Asada operates under, was set to provide $45,000 in wages and benefits by Saturday, according to the bankruptcy filing.
The debtors have money to pay these expenses,
The Fongs had filed a complaint noting that rent for December, January and February per month had not been paid, spurring the move toward bankruptcy, Bastian said.
The Fongs have majority ownership, 60%, in the company.
The Fongs initially approached McIntosh, who also helped open Nick’s Laguna Beach, about opening a restaurant in the space formerly occupied by Javier’s Cantina.
The two parties entered into a 30 year lease agreement on Aug. 25, 2010, according to court documents.
In 2011, they entered into an operating agreement in which the Fongs loaned McIntosh $1.5 million for the restaurant’s construction, with McIntosh acting as a managing member for the company, the bankruptcy petition said.
Disputes between both parties soon ensued over additional costs for the restaurant’s build out and money that was loaned by McIntosh and his family to cover those costs.
The restaurant also owes $53,000 to food supplier Sysco, according to documents. The company has an agreement to repay this amount over time,
Bastian said in a follow up email.