Dan's Papers - April 24, 2009 - Owning a Restaurant

A prominent restaurateur in the Hamptons was arrested last week and charged with having written $300,000 in checks that bounced.

According to the restaurant owner, he, like many other restaurateurs in these parts, was struggling to make it through the current economic downturn by taking a loan. As normal banking sources had all dried up, he had gone elsewhere, in particular, to a man in the "concrete construction" business, who people told him could make a $300,000 loan. The terms were harsh and the interest high. But he got the money. But then, when the time came to pay back the loan, he told the man he wasn't yet ready. The man insisted. And then he said if the restaurateur couldn't pay him, he wanted the keys to the place. So in that circumstance, the restaurateur wrote a check on an account that had insufficient funds to cover the amount. He was, he said after being arrested, sort of forced to do it to get out of there.

The restaurateur now says he has made other arrangements for his restaurant and it should be open in time for the Memorial Day weekend.

We know who this man is. A lot of people in the business know who he is. But out of respect for the fact that he has not yet had his day in court and considering the fact that these are very hard times to obtain financing and people can get pretty desperate, we will not reveal his name unless things get worse.

Personally, I would go nuts if I ever ran a restaurant. There are crazy cooks, cranky customers, long hours, bills to pay and all kinds of other stuff. On the other hand, owning a restaurant has always appealed to me, at least as a dream. Imagine, Dan's Bar and Grille. I'd serve burgers and fries, wild salads, desserts designed like sculptures or bits of modern architecture, and special drinks with umbrellas in them. And people would love me.

A long time ago, I actually did own a restaurant. It happened by accident. Few people knew. But it gave me a bit of a whiff of what such a thing would be like. I was completely overwhelmed by the idea and soon extricated myself from the situation.

I had sold an ad in Dan's Papers to a man who owned a restaurant in Sag Harbor on the site where Il Cappuchino is today. He seemed like a perfectly ordinary sort of man. Apparently I misjudged him.

The ad, for about $1,000, ran. He seemed happy with it. But when it came time to pay me, he demurred. Try me again in a week, he said. The place was bustling with business.

For the rest of the summer, I tried collecting the $1,000 from him. Each time, he put me off. Come back tomorrow. I might have something for you in two weeks. In late autumn he closed for the winter, still owing me the money.

The following summer, softhearted fellow that I was, I sold him more advertising for another $1,000. He told me how much good the ad had done him. He'd have both last year's $1,000 and this year's $1,000 in the bank before Labor Day and he'd pay me then.

It was a busy summer and I went over to the place a few times to eat. It was an Italian menu, and both the food and service were good. The second time we ate there, he came over to speak to my wife and me at the end of the meal and I reported to him that the experience was just fine. It was all very lovey dovey and friendly. And I was paying my restaurant bill as I was supposed to at the end of the meal.

But Labor Day came and went, and he still had not written me a check. He was still nice about it. He said he'd pay me later in the fall when all the money owed to him was paid.

I thought about that after I left. Exactly what did that mean? Money owed? I thought the rule of thumb in the restaurant business was that in the interval after the end of the meal and before you left the restaurant, you paid for what you ate.

Finally, I came to the conclusion I had to press the matter. I called him up and told him I would have to go to small claims court if he didn't pay me within a week. He seemed startled by that, but he said he understood. He didn't blame me.

When no check arrived, reluctantly, I went to Town Hall and filled out the paperwork for a small claims court matter of $2,000, copies of which the court sent to him. I got a date in court. And I showed up. When he didn't and therefore did not answer when the bailiff called his name out, the judge ruled in my favor. It was called a default judgment.

I called him up and told him what I had done and again he said he didn't blame me. And again he said a check would be on the way, which, again, it wasn't. And so, after a month passed without any further contact with him, I went back to court and told the judge, and he ruled that the judgment should be turned over to the sheriff. The sheriff would collect the money.

Honestly, this was the first occasion when things had gone so far that they had to be turned over to a sheriff.

Curious, I asked to meet with the particular sheriff who would be doing this. I got his phone number, and called him.

"I will go over there and, with the judgment, ask for the money," he said. "And if he doesn't pay me, I will ask a second time a week later. And if he still doesn't pay me, I will arrange for an auction of the restaurant. The judge will set a date."

As you have probably guessed, it came to that. The date was October 11, the week before Columbus Day that year. I asked the sheriff if I really needed to be there and he said no.

"If someone buys it, the first $2,000 would go to you. I will collect the money for you. After that, there will be a new owner at the restaurant. You don't have to be there for all of that."

Before the auction, considering the owner of the restaurant knew about all of this, I really expected to find a check in the mail. He was open and in business. But no check came.

When the phone rang on the day of the auction, I had totally forgotten about the matter. I wasn't going. It wasn't in my appointment book. Yet there was the phone call.

"We just had the auction," the Sheriff said. "But nobody bid. So that is that."

"What do you mean?" I asked.

"Well, you get to buy the restaurant for the $2,000 he owes you if you want. Do you want to do that?"

"Well, come on down to the courthouse and sign the papers."

I was really astounded by this. I had no idea one possible outcome was that I could own the restaurant. What, for heaven's sakes, did that mean?

"You don't own the building," the Sheriff explained. "He leases the space. So you own everything in it. The kitchen equipment, the utensils, the dishes, the tables and chairs, the checkered tablecloths. The sign out front. Even the cash register. You own it all."

"I just told you that."

"So I could go down there and collect the money from the cash register every night?"

"It's up to you. You collect the money. You pay the bills. But you would have to start it with a new corporation. You don't want all this guy's debts. Maybe he wants to stay. He would work for you. Anyway, it's yours."

Oddly, the first thing I thought was that what I ought to do is put an ad in Dan's Papers advertising the menu. Ads worked. Come meet the new owners.

But the more I thought about it, the more I thought I'd rather not own a restaurant. I'd be truly clueless how to run it. So that meant, and I confirmed this with the sheriff, I could clean the place out of everything in it I owned and auction it off for whatever I could get for it.

That night, I took a deep breath and called the restaurant. The owner, as he always did, cheerfully answered the phone with the name of the place. Slowly and carefully, I went about explaining to him what the sheriff had told me.

I got the impression that he had not fully grasped that concept until just this moment.

"Should I come down there with a truck?" I asked.

There was a long silence.

"Come on down on Sunday night. I'll pay you the $2,000," he finally said.

"Tell you what," I said. "I'll be home most of Sunday. Here's my number. When you've got the money together that evening, call me, and I will come over and you can give it to me. Then I won't take all the furniture."

Sunday was in three days. During the interval, it tickled me that I owned a spaghetti house in Sag Harbor. It was kind of bragging rights, I know. But it was also true. I told a few people.

Sunday came, and at 5 in the afternoon, he called me. Dinner is on me, he said, and I have an envelope for you. And I want to advertise with you again next year.

"All of what you owe?"

"Yup. The whole thing."

My wife and I went at 7, and as we sat down, he came over with an envelope with 20 $100 bills in it.

"Thanks for being patient," he said.

As promised, there was no bill. So I left the waiter a big tip. And that was the end of my owning a restaurant.