CITY HALL — Glendale officials this week spent $35,000 to end a longstanding legal battle with the troubled banquet hall Montrose Collection — and in the process acquired tables, dishes and a Chevy van.
The items were purchased as a part of the city's successful bid in bankruptcy court this week for the assets of the Montrose Collection Restaurant and Banquet Hall — including the restaurant's contents, liquor license and its owners' litigation rights against various parties, including the city of Glendale, said Chief Assistant City Atty. Mike Garcia.
With ownership of the litigation rights, the city can now dismiss the outstanding legal case and bring to an end repeated appeals of court decisions by the restaurant's owners Armen and Takui Aivazian, he said.
"We really wanted to put some finality to this," Garcia said. "The appeal just takes time. So rather than have to go through all that time, the city viewed it as beneficial to purchase the litigation rights and dismiss the appeal."
Since 2006, the Aivazians have repeatedly battled city zoning decisions, with the conflict bouncing from the zoning administrator up to the City Council to the Planning Commission and in and out of Los Angeles County Superior Court.
They even filed a slander lawsuit against neighbors who complained publicly about the impacts of the banquet hall. It was eventually dismissed.
The restaurant's legal troubles increased this year when the Aivazians filed for bankruptcy, which their attorney, Derek Tabone, has partially attributed to the ongoing legal battle.
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.
The restaurant had already been forced to stop operations in October when a Los Angeles County Superior Court judge granted the city's requests for a temporary injunction, a court mandate to stop violations of municipal code.
On Monday, the majority of items from within the restaurant — including tables, chairs and kitchen appliances — were sold during an auction to help pay back outstanding debt.
A creditor also bid on the assets, which drove up the city's winning bid to $35,000, Garcia said.
If the Aivazians do not turn over all of the restaurant's listed assets, including a Chevy van, they could be ordered in contempt of the court and potentially serve jail time, Garcia said.
Takui Aivazain declined to comment Wednesday.
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 countered that he has documents to prove the city had actually approved the banquet hall use. He could not be reached for comment Wednesday.