CITY HALL — A bankruptcy judge has ordered the owners of Montrose Collection restaurant to cease all operations — adding to the legal troubles mounting against the controversial banquet hall.
Montrose Collection Restaurant and Banquet Hall had already been forced to stop operations late last month when a Los Angeles County Superior Court judge granted the city's request for a temporary injunction, a court mandate to stop violations of municipal code.
City officials in June had filed a complaint against the restaurant for allegedly operating without proper permits, citing an earlier April court ruling that the city had the right to revoke the zoning exception that had allowed the banquet hall to operate.
In separate bankruptcy proceedings for the corporation that owns the restaurant, the judge earlier this month ordered owners to cease any business operations until the court ordered otherwise.
City officials said they viewed the order as an additional safeguard in their fight to keep the restaurant from operating illegally.
"For us, it is an extra level of protection to ensure their closure unless or until they get proper permits," said Chief Assistant City Atty. Mike Garcia.
The bankruptcy order was the latest event in a longstanding legal battle between owners Armen and Takui Aivazian and city officials.
"It's just a mess," the Aivazians' attorney, Derek Tabone, said of the multiple court proceedings. "It's a logistical mess."
The current legal battle began when the City Council revoked the restaurant's parking permit in March 2009 and the zoning certificate a few months later, saying there was insufficient parking for use as a banquet hall, which officials said was not allowed at the restaurant.
Tabone has claimed the city approved the banquet hall use on a prior building permit.
Tabone said the current bankruptcy proceedings are largely due to the "very public" battle with the city, which initially hurt business and has now halted operations entirely.
The initial December 2009 bankruptcy filings show the corporation — ATNA Enterprises, of which Takui Aivazian is listed in public documents as an owner — owed creditors $660,000.
"People who want to schedule something a half-year or year in advance won't come to you. They don't know if you are going to be there in a year," Tabone said. "That's the bread and butter of the business, things that people plan months and months in advance."