Wednesday, June 3, 2009

Monell's restaurant files for bankruptcy

Finance company threatens foreclosure over $620,000 debt By Wendy Lee • THE TENNESSEAN • June 3, 2009 Monell's Dining & Catering, a family-style restaurant where diners rub elbows with other guests, has filed for Chapter 11 bankruptcy in a dispute with a financial services company that threatened to foreclose on the chain's Germantown location, Monell's owner said. The restaurant is embroiled in a dispute with Capital Crossing Servicing Co., an asset purchaser active in the secondary loan market, over an estimated $620,000 debt, said Monell's owner Michael King. Tied to that debt are three of Monell's properties — its signature Sixth Avenue restaurant in Germantown, along with other properties on Charlotte Pike and in Gallatin — with a combined estimated value of about $1.2 million, King said. The location on Charlotte Pike is closed. The bankruptcy filing allowed Monell's to hold off what King said were the lender's foreclosure proceedings. Monell's attorney Victoria Ann Ferraro declined to comment further. A telephone call to Capital Crossing wasn't returned on Tuesday. In court records, Monell's lists its largest creditors as the Internal Revenue Service, which is owed $72,260; and the Tennessee Department of Revenue, owed $13,200. King said the nearly 15-year-old business is still profitable. Sales are up 6 percent to 7 percent at his restaurants compared with last year, he said. Monell's currently has four operating restaurants, including an express location. Customers surprised Customers at Monell's in Germantown on Tuesday night were surprised to hear of a bankruptcy filing. "There are few places in the world where you can feel like you're at Grandma's house for lunch or for dinner," said Gary Wade, 60, as he entered the Sixth Avenue restaurant. "I'll keep my fingers crossed they can pull out of bankruptcy."

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