Updated Wed, Sep 25, 2013 4:10 pm
A judge gave approval Wednesday for a court-appointed receiver to close Abrio’s Vera Cucina, a debt-ridden restaurant on East State Street in Athens.
Follow the ruling, receiver Jack Harris of CMH Hospitality Inc. said the restaurant would close that same day. He left the courtroom to tell the restaurant's employees.
One of the restaurant's creditors, a company called Last Hurrah, argued against the closing, asserting that it would reduce the value of the property and therefore hurt creditors.
In April, Judge L. Alan Goldsberry granted a $305,138 judgment against the restaurant’s owner, Lady Hawke LLC, and in favor of the Ohio University Credit Union. The credit union claimed that Lady Hawke failed to keep current on monthly payments on a $300,000 loan. The receiver was appointed at that time.
Harris has been operating the restaurant with the goal of maintaining its value as a business, but changed his mind and sought court permission to close the restaurant because it is continuing to lose money.
At a hearing Wednesday, Judge Robert Stewart said he is convinced the restaurant is not making money and granted Harris authority to close it. Stewart conducted Wednesday's hearing because Goldsberry was in a jury trial.
Two other creditors — Athens County's revolving loan fund and Buckeye Hills-Hocking Valley Regional Development District, who helped fund Lady Hawke's purchase of the restaurant — did not object to the request to close the restaurant.
Attorney Jonathan Sowash, representing Last Harrah, argued that closing the restaurant would be "premature, a wrong move." Last Harrah, a company of Athens businessman Joe Limoli, sold the restaurant — then called Abrio's Brick Oven — to Lady Hawke.
Sowash described the proposed closing as "the wrong thing for all the creditors, the wrong thing for Last Harrah, the wrong thing for the employees there."
Sowash said a shuttered restaurant will have less value. He noted that Limoli originally bought the restaurant, a former Damon's, at a sheriff's sale after it sat vacant for two years.
Sowash said that when Limoli operated the restaurant, October was historically its best operating month.
James Coutinho, attorney for Harris, said it had been expected that the number of customers would pick up significantly after OU students returned this fall, as it had in past years.
"We did not see those sales return," Coutinho told the court. "Our emergency motion (to close) is simply the receiver seeing the writing on the wall."
He argued that continuing to operate and incur more costs would eat away at what value remains for the creditors.
"Who's going to fund the losses if we continue to operate?" he asked. "All we're doing now is wasting everybody's money."
In his request for permission to close the restaurant, Harris indicated the plan is to sell the building, furnishings and equipment.
The OU Credit Union is asserting it is first among the creditors, ahead of the Economic Development Council (which operates the county revolving loan fund) and Buckeye Hills. Last Harrah is fourth.
Athens County’s revolving loan fund loaned $230,000 toward the purchase of the restaurant, and Buckeye Hills-Hocking Valley Regional Development District loaned $100,000.
Sowash said Last Harrah is owed about $275,000, with about $250,000 of that in the form of a mortgage.