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Monday, September 16,2013

Abrio's operator now wants court approval to shut down restaurant

By Jim Phillips
Photo Credits: Kevin Riddell/Athens NEWS
Photo Caption: Abrio's Vera Cucina.
Not long after he asked a judge to approve hiring a real-estate agent to sell Abrio's Vera Cucina restaurant in Athens as a going concern, a businessman who has taken over the running of the business has now suggested in a court filing that it may be beyond saving.

In an emergency motion filed in Athens County Common Pleas Court Thursday, an attorney for Columbus restaurateur Jack Harris has asked Judge L. Alan Goldsberry to give Harris authority to shut down the East State Street restaurant immediately and try to sell off its assets. Goldsberry has set a hearing in the matter for next Wednesday.

Harris, of CMH Hospitality, Inc., was appointed to take over operations of the restaurant when it went into receivership earlier this year. The restaurant's owners had defaulted on a $300,000 promissory note from the Ohio University Credit Union. Harris was brought in to try to improve sales at Abrio's, in the hope that at some point it could be put on the market for sale as a profitable business. Harris has apparently now given up that hope.

In August, Harris had filed motions asking that other creditors - including the Athens County Economic Development Council, the Buckeye Hills-Hocking Valley Regional Development District, and the business's former owner, Last Hurrah, LLC - be brought into the legal case involving Abrio's. Harris also asked for permission to hire a real-estate agent to try to sell the business as a going concern, at an initial asking price of $875,000.

The rationale for joining the other creditors as parties to the legal case was so they could assert any claims they had to get a share of the proceeds if and when the business was sold.

Now, however, Harris is asking to be allowed to close Abrio's, and try to sell off its building, furniture, fixtures and equipment.

"The sales at the restaurant have not recovered," the newest motion states. "In his experience and business judgment, (Harris) does not believe that there is any value to the restaurant as a going concern or that it will be possible to maintain operations on a going forward basis."

After a company called Lady Hawke, LLC, bought the restaurant in 2012, the motion states, business there "never amounted to the levels expected by its (new) proprietors," and within a few months the new owners began to default on their payments to creditors including the Credit Union.

Though the motion boasts that Harris "has been successful in keeping the restaurant staffed and well-managed," and "has engaged in numerous and creative marketing efforts," it admits that despite these efforts, "sales through the summer and into the fall months have been extraordinarily slow."

One possible reason for the too-optimistic sales projections, the motion says, was the belief that they would pick up when Ohio University's summer break ended. "The receiver had hoped, based on prior years' financials, that the return of students to campus would help drive sales," the document states. That effect apparently has not materialized.

It also assigns some blame, however, to articles published in The Athens NEWS, which "referenced alleged criminal matters of the owners of Lady Hawke, and questioned the due diligence of the financial lenders." These articles, the motion alleges, "negatively affected sales and caused additional harm to the reputation of the restaurant."

The two articles in question reported that the Economic Development Council and the Development District both had money invested in Abrio's, and that neither organization apparently had been aware when they loaned money to the business that one of Lady Hawke's owners had been arrested on a drug charge in another state in 2011. That criminal case was resolved with a plea that was held in abeyance, meaning the charges could be dismissed if the defendant met conditions laid down by the court.

Though Harris has worked hard to get Abrio's back on its feet, the motion says, the restaurant needs to gross $14,000 a week in sales to stay in business. "Unfortunately, the revenue generated by the restaurant has not recovered, and is not likely to do so without a rebranding of the restaurant," the motion says.

While an earlier motion in the case had indicated Harris wanted to market the restaurant as a "going concern," in the latest filing he says he wants to keep paying the ground rent while he and his real-estate broker work to sell off the building and its accessories.

"The receiver does not believe there is any option other than shutting down the restaurant at this time," the motion states, estimating that if it stays open, it will be losing as much as $20,000 a month, requiring more borrowing by the receiver - who has already taken "two small loans" from the OU Credit Union to cover operating expenses.

"Moreover, the receiver does not believe that there is any benefit to trying to preserve the restaurant as a going concern," the document adds. "All of the goodwill value of the restaurant has been wiped out by the events leading up to the receivership."

If the judge approves his request, the motion says, Harris will set a shut-down date for the restaurant, before which he will try to sell off as much inventory as possible. Though Harris will let the staff go, it says, he will work with them, using his connections in the restaurant industry, to find them new jobs.

The building in question, which sits in the parking lot of the Athens Mall, previously housed a Damon's restaurant outlet.

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Maybe they could turn it into a really huge Tim Hortons........



Maybe Texas Roadhouse should take over this mess, and provide something positive to the community, rather than supplanting the Farmer's Market and its culture of local entrepreneurship. 



An indoor market?




Yeah, I don't understand the thought process. We have had Captain D's, Damons, Bennigans and this place go out of business in the last couple of years (and I am probably missing others), but still someone is coming in to build another restaurant in a spot that is well known for the Farmers Market. I wonder about the marketing research that says a Texas Roadhouse will do well in a town that loses a large number of its residents at various times of the year, and I am guessing has a price point a bit above what the avaerage college student will be looking to spend on a regular basis. I agree, have TR take over this place, tear it down or use it, and if they go under, it won't have affected the Farmers Market which has been going strong for years.Then again, I went to Pondorosa the first week it opened as a small child, and thats been...a long time ago! Viva la cheap meat!