Clock ticks on Aspen Kitchen sale
December 2, 2016
Deal or no deal?
That’s the question a federal bankruptcy judge is tasked with answering after the defunct Aspen Kitchen’s biggest creditor took steps Thursday to keep the sale on schedule to close in mid-December in an effort to thwart the purchase.
Aspen Kitchen investor Hanford Holdings, which is owed more than $3.6 million by the owners of the restaurant, wants conditions of the sale — which was approved Wednesday by Denver bankruptcy Judge Elizabeth E. Brown — to proceed as ordered.
Hanford’s motion was in response to a previous motion filed by bankruptcy trustee Michael Staheli. Filed roughly two hours after Brown’s oral ruling, Staheli’s motion asked the judge to reconsider her order demanding a 14-day stay on the sale. New York-based Craveable Hospitality Group wants to close on the purchase as soon as possible, and no later than today, so it can open in time for the busy holiday season. If it can’t, then the deal is in jeopardy.
“The practical result of not getting the 14-day stay period waived is that the sale to Craveable is all but dead,” Staheli wrote.
Brown, when delivering her ruling Wednesday, noted Craveable is an “insider” to the debtor, the disputed owner Rocky Aspen LLC, which filed for Chapter 11 bankruptcy protection in March. But she also noted that Aspen real estate brokers have indicated that other parties aren’t interested in taking the space once occupied by the upscale restaurant and retro nightclub because their combined $84,000 in monthly rent is “above market rates.” She also said without a bankruptcy settlement, she expects more litigation to ensue that would be “very messy and very lengthy.”
“The reputation of the business has taken a lot of hits in this small but affluent town,” she said.
As the court-appointed trustee in charge of managing the finances of Aspen Kitchen and Rec Room, Staheli shut down the two businesses Sept. 15. Multiple employees, except for the business’s Aspen accountant, were fired on short notice.
Brown’s order calls for Craveable to pay off $250,000 in mechanic’s liens filed by contractors on the 204 S. Galena St. construction project, where the Aspen Kitchen and Rec Room opened in December 2015, as well as $644,207 for other debts.
Hanford’s motion contends the judge’s order was “based largely on its own unsubstantiated assumptions,” and that Hanford will “suffer irreparable injury unless the requested stay is granted because Hanford was frozen out of the bidding process …”
Judge Brown is expected to rule on the motions soon. At Wednesday’s hearing, after attorneys said they would argue to expedite the sale, she said, “We’ll watch for your motion for stay and act accordingly. I would hope the parties would respond on the motion very quickly so the court can address it.”