Local bar exits bankruptcy but stays in debt

The Republic

The Republic owes more than $300,000 in back taxes. (Photo by Michael Schwartz)

A Fan area bar is out of bankruptcy but not out of the woods.

A judge this month dismissed the Republic Restaurant & Bar’s Chapter 11 bankruptcy case after the state claimed the restaurant had continued to stack up tax debt following its filing, which is cause for dismissal.

“We basically allowed it to be dismissed,” said Roy Terry, an attorney with Sands Anderson who represented the Republic and owner Tony Hawkins in its bankruptcy. “I felt after looking at the situation that the amount owed was very doable.”

Hawkins said he was working out a payment plan with the state to repay more than $300,000 in back taxes Republic owed.

Local restaurateur Richard Lyons opened the Republic in late 2009. Hawkins, who began as a minority partner, took full ownership in June 2011.

The Republic was put into Chapter 11 bankruptcy in July, after the government padlocked the restaurant in attempt to recoup unpaid taxes.

Terry said the tax debt was largely accrued during the previous owner’s tenure.

“It wasn’t all his doing,” Terry said of Hawkins. “He was a minority owner, and then he bought the majority. And when he did that, he thought it was free and clear, but there was some existing tax debt that he acquired with the business.”

Hawkins’s legal troubles don’t end with the Republic’s bankruptcy dismissal. His partners at Metro Grill, the other restaurant he owns, sued him in November, alleging that he withheld their share of company profits.

The partners, Travis Bacile and Richard Masters, are seeking the $40,000 they each paid to buy the business, plus $120,000 in damages.

Hawkins, who is representing himself, filed a response to the suit denying that he withheld profits and claiming that Masters and Bacile had failed to hold up their end of the bargain.

Hawkins’s response claims that the partners had not contributed to the renovations of the Metro building and said their share of the profits would be paid when they met their obligations for the build-out.

The three partners purchased Metro Grill, at 301 N. Robinson St., in April. The final purchase price was $175,000, and Hawkins is listed as 60 percent owner and managing partner.

In his response, Hawkins said he put almost $200,000 into the restaurant and would gladly relinquish his stake in the restaurant if Masters and Bacile pay in $300,000.

Keith Pagano, an attorney with Pagano & Marks who is representing Masters and Bacile, said in an email that Hawkins’s response was inadequate and that his clients are moving forward with the case.

“We believe the answer is untimely, technically deficient and, taken on its face, it does nothing to bolster Mr. Hawkins claims,” Pagano wrote. “We believed from the beginning that our position was strong and, in light of Mr. Hawkins answer and the many admissions therein, we believe our position now to be very strong.”

Hawkins said he has had no contact with Pagano or his partners since filing the response. No hearing date has been set, according to Richmond Circuit Court records.

The Republic

The Republic owes more than $300,000 in back taxes. (Photo by Michael Schwartz)

A Fan area bar is out of bankruptcy but not out of the woods.

A judge this month dismissed the Republic Restaurant & Bar’s Chapter 11 bankruptcy case after the state claimed the restaurant had continued to stack up tax debt following its filing, which is cause for dismissal.

“We basically allowed it to be dismissed,” said Roy Terry, an attorney with Sands Anderson who represented the Republic and owner Tony Hawkins in its bankruptcy. “I felt after looking at the situation that the amount owed was very doable.”

Hawkins said he was working out a payment plan with the state to repay more than $300,000 in back taxes Republic owed.

Local restaurateur Richard Lyons opened the Republic in late 2009. Hawkins, who began as a minority partner, took full ownership in June 2011.

The Republic was put into Chapter 11 bankruptcy in July, after the government padlocked the restaurant in attempt to recoup unpaid taxes.

Terry said the tax debt was largely accrued during the previous owner’s tenure.

“It wasn’t all his doing,” Terry said of Hawkins. “He was a minority owner, and then he bought the majority. And when he did that, he thought it was free and clear, but there was some existing tax debt that he acquired with the business.”

Hawkins’s legal troubles don’t end with the Republic’s bankruptcy dismissal. His partners at Metro Grill, the other restaurant he owns, sued him in November, alleging that he withheld their share of company profits.

The partners, Travis Bacile and Richard Masters, are seeking the $40,000 they each paid to buy the business, plus $120,000 in damages.

Hawkins, who is representing himself, filed a response to the suit denying that he withheld profits and claiming that Masters and Bacile had failed to hold up their end of the bargain.

Hawkins’s response claims that the partners had not contributed to the renovations of the Metro building and said their share of the profits would be paid when they met their obligations for the build-out.

The three partners purchased Metro Grill, at 301 N. Robinson St., in April. The final purchase price was $175,000, and Hawkins is listed as 60 percent owner and managing partner.

In his response, Hawkins said he put almost $200,000 into the restaurant and would gladly relinquish his stake in the restaurant if Masters and Bacile pay in $300,000.

Keith Pagano, an attorney with Pagano & Marks who is representing Masters and Bacile, said in an email that Hawkins’s response was inadequate and that his clients are moving forward with the case.

“We believe the answer is untimely, technically deficient and, taken on its face, it does nothing to bolster Mr. Hawkins claims,” Pagano wrote. “We believed from the beginning that our position was strong and, in light of Mr. Hawkins answer and the many admissions therein, we believe our position now to be very strong.”

Hawkins said he has had no contact with Pagano or his partners since filing the response. No hearing date has been set, according to Richmond Circuit Court records.

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