Case Study

NYC Restaurateur Held Accountable for Debts

Restaurant Supplier Recovers Payment for Service Rendered

Challenge

A linen supplier/laundry service provided services to a well-known Upper East Side restaurant named after its principal owner. When the restaurant failed, its owner refused to pay the linen supplier.

Solution

Trachtenberg Rodes & Friedberg represented the linen supplier/laundry service in recovering its accounts receivable. We investigated and learned that the restaurant was stiffing suppliers all over town and quickly obtained a judgment against the owner. With the judgment in hand, we engaged in post-judgment discovery. Upon further investigation, our team found that the restaurant had entered into an agreement to sell its assets to a third party. The sales agreement included provisions for the purchaser to employ the former owner for the sake of his notoriety and his historical association with the restaurant. The sale was a clear attempt to avoid creditors and allow the restaurant to continue operation under the same name and for the benefit of the current owner.

Armed with this information, we brought an expedited turnover proceeding against the third party on the basis of successor liability. We also informed the third party that we would immediately bring a contempt motion against the namesake of the restaurant.

Result

Our swift and aggressive tactics resulted in the prompt and efficient settlement of our client’s claim.