Michael’s Files for Chapter 11

Michael’s restaurant has filed for protection under Chapter 11 of the bankruptcy code. Michael McCarty, who owns the Santa Monica restaurant and two others in Washington and New York, says that his restaurants “do fine.” (Two years ago, McCarty lowered prices on his Santa Monica menu, which was infamous for its $12 dish of ice cream and $10 bottle of Evian.) The filings were to protect the restaurants from the major debt McCarty incurred in his ongoing fight with the city of Santa Monica over his right to build a 160-room luxury beach hotel.

The hotel project was approved by the Santa Monica City Council and later rejected by voters. McCarty subsequently filed a lawsuit against the city, claiming that, despite the election, he still has a valid contract to build the hotel.

“Now my restaurants will no longer have to be pressured by the $4-million worth of creditors--they can exist on their own,” McCarty says. “I won’t have to use money from them to fight my battle. There is just no way (this battle) is ever going to be reconciled by draining my restaurants.”

Will McCarty ever build his beach hotel? “The law is very clear,” he says, “and the bottom line is that my goal as an artist is to build and run that hotel. Plus, I think that I tend to outlast people.”