GOLDEN BEAR MAY OPEN AT A NEW SITE

One of the operators of the defunct Golden Bear nightclub in Huntington Beach said Sunday that a federal bankruptcy judge’s order last week to liquidate their corporation “will have no effect” on plans to reopen the club at a new location.

Golden Bear operators Richard and Charles Babiracki filed last April for protection from creditors and reorganization of more than $200,000 in debts under Chapter 11 of the U.S. Bankruptcy Code. But on Feb. 25 in Santa Ana, Judge Peter Elliott converted the case from a Chapter 11 reorganization to a Chapter 7 liquidation because “there is nothing left in the estate . . . nothing left to reorganize,” said John C. Tonery, the attorney in the U.S. trustee’s office who requested the Chapter 7 conversion.

“When the business closed, it wasn’t bringing in any more money, so this (conversion) was something that was recommended by counsel,” Richard Babiracki said. “We have a new location and should be signing a lease next week. We hope to reopen in 45 to 60 days. The Chapter 7 conversion won’t have any effect at all.” Babiracki did not specify the new location.

Chapter 11 allowed the Babirackis to remain in operation, but under Chapter 7, a business is shut down and its assets are liquidated to pay creditors. The Chapter 7 conversion will also prevent the Babirackis from doing business as Westcoast Folk Clubs Inc., the corporation name under which they operated the Golden Bear.

Assets of Westcoast Folk Clubs to be gathered by the trustee and liquidated will likely include the furniture, sound system, lights, kitchen supplies, musical instruments and other equipment the Babirackis retained when the property owners evicted them from the building on Jan. 29.

The Chapter 7 action does not prevent the Babirackis from starting another business, but any new venture could not legally use money or assets that were part of the old business, Tonery said.

“We may be able to purchase the old equipment from the estate. We will make a bid on it. It has more value to us than anyone else,” Babiracki said.

In documents accompanying the request for the Chapter 7 conversion, bankruptcy analyst Robert E. Bircher III complained that the Babirackis failed to file various statements and that they never submitted a plan for financial reorganization, as required in Chapter 11 cases.

“The U.S. trustee should not have to ‘chase’ Chapter 11 debtors into the Bankruptcy Court to gain their cooperation,” Tonery wrote in requesting the conversion.