Friday, September 11, 2009

Restaurant experts claim that recent closings and Chapter 11 filings indicate that residents of New York City can expect more restaurants to shutter i

Across the city, several long-suffering small businesses gave in the dour economy and filed for bankruptcy reorganization this week. Historic Café des Artistes on West 67th Street closed last weekend after decades in business, and other eateries around the city may be facing similar fates.

On Third Avenue in the East Village, Café Deville filed for Chapter 11 protection, listing assets between $100,000 and $500,000, along with liabilities of the same amount. A lawyer representing the café explained that Café Deville is changing hands, but declined to offer further details. The restaurant owes money to a host of creditors, including some $4,000 to Royal Crown Pastry, a bakery in Brooklyn, and Syosset, Long Island-based Southern Wines & Spirits, which Café Deville owes more than $2,000.

In East Harlem, neighborhood favorite Tito's Pizzeria and Restaurant filed for Chapter 11 bankruptcy protection on Thursday. The Second Avenue business, which filed under the corporate entity 303 FD 149 LLC and cited assets of $23,000, owes more than $127,700 to creditors. There was no answer at Tito's main phone line. According to the filing, Tito's was scheduled to appear at a commercial eviction hearing with landlord Kamela Property Corp.

Last week, Café des Artistes announced it would be shuttering thanks to poor sales and high costs. The restaurant's owners reportedly used $2 million of their own money to keep the business alive over the last decade. In addition, SoHo's Miro Café filed for Chapter 11 in August. Though the eatery plans to restructure, it is doubtful Miro will ever open a recently-leased second location on lower Broadway.

Restaurant experts say this is just the tip of the iceberg, and that New Yorkers can expect more of their dining favorites to shutter in the coming months. After a tough summer, many restaurants will lack the funds to make it through the holiday season and will close this month or next, rather than waiting until January—the traditional month for closure.

“The people who have made it through the summer will make a big decision in October; ‘Shall we try to make it through the end of the year and recover, or do we pack it in now?'” said Clark Wolf, who runs an eponymous restaurant consulting business, in a recent interview.

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