Festival Leaves a Bad Taste : Business: The producer of the Southland’s largest food event says he is out of business and has no assets.

Two months after Southern California’s largest food festival took place in Santa Monica, the event’s producer has announced he is out of business, leaving dozens of suppliers, entertainers, and workers unpaid, and the future of the event in doubt.

“I’ve closed my doors. We have no assets,” said Martin Ellis, the Beverly Hills businessman who staged Seagram’s Taste of L.A. for six years. The festival, featuring specialties from upscale restaurants such as Citrus, the Bistro and Rex il Ristorante, was held over two weekends in August.

Although Ellis said the Taste of L.A. attracted 50,000 people, he and the event have since been awash in controversy. First, Santa Monica filed suit for breach of contract and fraud. The city claimed Ellis and his firm, Martin J. Ellis Co. Inc., paid to rent the Santa Monica Civic Auditorium with three bad checks totaling $45,000, and failed to pay $13,380 for city services.

Then, more than a dozen businesses said they too had gone unpaid or received checks that bounced. They performed services ranging from security, cooking equipment and printing to entertainment groups who provided music while the crowds ate.

The festival operations manager said he and more than 40 custodial workers got stiffed. An American Red Cross official said that organization received a rubber check for $1,000 in first aid services.

“Bouncing a check on a charity such as the Red Cross is like poking a handicapped kid in the eye,” complained Red Cross General Manager Robert Burns.

Two homeless-relief agencies and the Los Angeles County Museum of Art, all promised donations in the festival’s promotions, said they got nothing.

Santa Monica Deputy City Atty. Amelia K. Sherman said Tuesday she would amend the city’s complaint to collect more damages, and add a civil cause of action under the federal Racketeer Influenced Corrupt Organizations (RICO) Act “because of the pattern of fraud.”

Standing in the eye of the storm, Ellis denies he defrauded anyone, or that he is even to blame. “I’m ready to leave town,” he said, “with my head high and happy.”

He said his Seagram’s Taste of L.A. was a success, grossing $1.5 million. The restaurants got proceeds of about $1 million. Ellis, 46, said he used the remainder for expenses, but still owes about $180,000.

The “shortfall” was caused by others, Ellis said: “I had money stolen from me at the gate, I had a city harassing me and I had a corporation default on a contract.”

“I’m not harassing him, I’m just suing him,” Sherman countered.

Ellis charged that ticket sellers embezzled about $40,000 in entrance fees. He reported the matter to Santa Monica police, but a department spokesman said the investigation has been suspended because Ellis provided no names of witnesses or other details.

Ellis also said the House of Seagram, his main sponsor for the last four years, failed to honor its contract to pay him $75,000 within 60 days after the event.

“Seagram defaulted on their payment,” Ellis said.

Seagram maintained that it met all its financial obligations to Ellis for the 1991 festival, company spokesman Robert Kasmire said. Further payments were due, Kasmire added, “only if Seagram was going to continue sponsorship. And it is not.”

Seagram is not responsible for Ellis’ debts, Kasmire said.

Ellis, described by others as smooth-talking and articulate, has a reputation for making the Taste of L.A. a quality event. “It’s renowned as the premier food festival,” said the Bistro’s Chris Niklas in Beverly Hills.

But Ellis is also said to be slow to pay his bills, and in past years has been as much as a year behind in festival debts. He is even late to pay his taxes, for which the State Franchise Tax Board suspended his two companies.

“We bounce checks every year,” Ellis said candidly, but stressed that all got paid.

For years, vendors tolerated his practices because he made payments and was very convincing. “I never had a problem before,” said Susan de Bois, who said Ellis still owes her and 18 bands $35,000. “Marty runs behind sometimes.”

Meanwhile, the charities say the controversy will not help them. Promotions for the Taste of L.A. had emphasized its contributions. “We are disappointed,” said Vivian Rothstein, director of one of this year’s slated recipients, the Ocean Park Community Center.

Ellis, an event producer for the last two decades, said the Seagram-sponsored food festival was his principal business.

He blames this company for problems, as he has blamed other sponsors in the past. In a bankruptcy action filed in Illinois, Ellis said a fitness show failed in 1982 because an investor “made a commitment . . . and then backed out.”

In a 1985 Los Angeles County Superior Court suit, a business partnership said Ellis issued bad checks and owed them money after he put on a computer show in Long Beach. In court documents, Ellis blamed a sponsoring computer company for “not putting up the sufficient capital they promised.”