Age-Old Problem at a New Age Restaurant

Maybe it’s an omen. Since June 13, the Inn of the Seventh Ray, the ethereal Topanga Canyon eatery that should rank high on any reasonable list of the world’s most California enterprises, might better be called the Inn of the Eleventh Chapter.

That’s right. Chapter 11 for everybody’s favorite New Age restaurant.

Given its lovely setting and considerable reknown, how could the inn end up in bankruptcy court? Was it some inauspicious alignment of the planets? The solar eclipse? A cloudy aura?

Nah. It was just the Internal Revenue Service. The inn owes Uncle Sam roughly $200,000 in a dispute going back to the mid-1980s.

The inn’s tax problem is really just a manifestation of troubles its founders, Lucile and Ralph Yaney, have had in making the transition from psychotherapy, their regular line of work, to entrepreneur.

Such woes are suffered by many who launch a business, especially entrepreneurs with scant background who decide to become restaurateurs. Owning a restaurant sounds great, but making it pay isn’t easy.

The good news is that the Inn of the Seventh Ray is still in business and still claims to serve food “charged by our dedicated staff with the vibration of the violet flame for your personal gain, and perhaps transportation to a higher plane.”

Vibrations notwithstanding, Lucile Yaney says she hopes to have the place out of Chapter 11 shortly, assuming that something can be worked out with the IRS, of whom she complains, “They kick you when you’re down.”

(The IRS won’t comment on specific cases except to say that it slapped liens on the restaurant for unpaid payroll, unemployment and corporate taxes. Penalties and interest have been assessed because the money was overdue.)

The inn, a corporation, lists assets of $51,000 and liabilities of $383,200, but the restaurant site is owned by the Yaneys personally. Mrs. Yaney says that the inn’s obligations are being met (aside from the IRS) and that restaurant operations aren’t affected by the filing.

That will be a relief to the restaurant’s fans, who are legion. Since its founding in 1975, the place has become something of an institution for its offbeat menu, which emphasizes natural ingredients, and its idyllic creek-side location, deep in Topanga Canyon. Sunday brunch is especially popular, and Mrs. Yaney says the inn does 50 weddings a year. It’s even been in Bride magazine.

The Yaneys--she’s a psychologist, he’s a psychiatrist--started the place as a hobby that grew out of their spiritual search, a search that eventually brought them to the controversial Elizabeth Clare Prophet, also known as Guru Ma.

For years, the Yaneys lost money on the restaurant, which seats 150 in and around a converted Foursquare Gospel church. Trial and error seems to have been an important planning tool.

“We started trying to cleanse our bodies and get ourselves not to be so dense,” Mrs. Yaney told The Times in 1986. “Whenever we found anything new, we would try it out on our patients.”

Luckily, the Yaneys caught the wave of a dining revolution with their salads, fish and other light fare. Profits eventually followed.

In 1987, the Yaneys put the place up for sale, hoping to follow Prophet to a 33,000-acre ranch in Montana, where her Church Universal and Triumphant had relocated.

The Yaneys asked $1.2 million for the business and its three-quarter acre site. At the time they said 1986 revenue was $1.2 million, with pretax profits of about 10%. Mrs. Yaney says the inn is still profitable, but won’t discuss figures.

Anyway, there were no buyers, at least not with solid financing, and the Yaneys’ troubles multiplied.

Keeping the inn, they opened two new restaurants in Bozeman, Mont., but both failed. Mrs. Yaney says she and her husband filed briefly for personal bankruptcy in Montana, but later withdrew their petition.

“We got into a bad space about four years ago,” Mrs. Yaney says.

Out in Topanga Canyon, meanwhile, it seems to be business as usual at the inn. Mrs. Yaney says the inn has a new chef, expanded parking and plans to upgrade its menu. She says volume at the restaurant has doubled since 1987. The food, she says, is “better than ever.”

And you can still browse in the neighboring Spiral Staircase bookstore, where I once bought a cherished volume called “Pinstripe Prayers,” which included such moving offerings as “Prayer Before Firing Someone,” as well as invocations useful for demanding a raise and driving a rented car.

According to Mrs. Yaney, the inn is so named because “light passing through a crystal splits into seven rays,” each symbolizing a type of energy. The seventh, she says, is violet, the ray of transition.

The hope now is that the ink remains black, the color of reorganization.