Palace Closes Doors in Bankruptcy Case

The Palace, one of Hollywood’s key pop-rock venues since 1980, has been given court approval to sell its assets in a plan to provide the resources needed to reopen the club.

Bankruptcy trustees, who began monitoring the club’s finances two weeks ago, padlocked its entrance on Oct. 30, Kay Neill Nelson, attorney for club owner Dennis Lidtke, said Tuesday.

All bookings for the Palace, 1735 N. Vine St., have been put on hold. Approximately 100 Palace employees have been let go, Nelson said. The plan, she added, is to reopen late this month.

The attorney said Lidtke, 53, owes “thousands of dollars” in taxes to the IRS and is the target of an $800,000 lawsuit filed by Palace Realty, a limited partnership that owns the building and the land it rests on.

U.S. Bankruptcy Judge Barry Russell ordered Lidtke’s Chapter 11 proceeding to be converted into a Chapter 7 proceeding Monday, allowing Lidtke to sell off the club’s assets to pay his creditors, Nelson added.

A alleged series of robberies in 1988 cost Lidtke more than $1 million, causing Palace Management Corp. to file for bankruptcy in May, Nelson said. Before being converted to a rock showcase, the 63-year-old venue was used as a theatrical playhouse and a setting for network television shows.