Asada files for bankruptcy
A judge earlier this week granted two motions on behalf of a Laguna Beach restaurant seeking bankruptcy protection.
Attorneys for Asada Laguna Beach filed for bankruptcy protection April 8 and then filed two motions — one that allows the company to pay employee wages and another to pay utilities — with the U.S. 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, Bastian said.
The Fongs had filed a complaint noting that rent for December, January and February —$21,630 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.
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