Liquid Sky and Junk at Snowmass placed in receivership | AspenTimes.com

Liquid Sky and Junk at Snowmass placed in receivership

Carolyn SackariasonThe Aspen TimesAspen, CO Colorado

Jeremy Swanson/Special to The Aspen TimesSkiers gather on the deck of Liquid Sky and Junk, at the base of Snowmass, last winter.

ASPEN – Liquid Sky and Junk restaurants in Snowmass Base Village have been put into receivership as a result of business owner Scott DeGraff defaulting on a $2 million loan to his landlord, court documents allege.Judge James Boyd of the Ninth Judicial District Court on Thursday appointed local CPA firm Otte & Cotte as the receiver on behalf of Related Westpac, the owner of the spaces where the bar and restaurants are located.Otte & Cotte now have the custodial responsibility for the property, including tangible and intangible assets and rights. That includes supplies, inventory, equipment, furniture, fixtures, bank accounts, checks, revenues, profits and all documents associated with the businesses, as well as DeGraff’s personal property held in his name.DeGraff signed a promissory note with Related Westpac on Nov. 13, 2007, and agreed to pay back the loan by Aug. 13, 2009. According to court documents, DeGraff still owes $1,992,292.According to the complaint, filed by Related Westpac’s local attorney, Joe Krabacher, DeGraff has failed to make monthly payments since March, and the total amount due as of Sept. 30 was $129,073.The note, which came due in August, is secured by a deed of trust, among other security instruments.Related Westpac advanced DeGraff $510,550 to pay for construction costs associated with finishing the restaurant and bar spaces, according to the court documents.Yet, several liens have been filed against DeGraff by construction companies who, combined, are owed nearly $1 million for improvements made to the property.Colorado First Construction Co. and PCL Construction Services Inc. of Denver filed a lawsuit in June in Pitkin County District Court. The suit claims that DeGraff owed $663,732.41 for work done at Liquid Sky and Junk, which opened in December and have been closed since the end of last ski season.The lawsuit claims DeGraff agreed to pay the construction group $1.89 million to perform interior and exterior finish construction work. The total was later upped to $2.11 million because of additional work.Other subcontractors have filed liens for amounts ranging from $26,250 to $207,000.DeGraff also agreed in the promissory note that he would make payments to Related Westpac from the first available net operating income from his other bar and restaurant, Junk at the Red Onion, which was supposed to open this past summer.But that never came to fruition – the building’s landlords, local attorneys Ron Garfield and Andy Hecht, terminated DeGraff’s lease in July.Liens and lawsuits have been filed against DeGraff on that property as well. Bill Poss, owner of Poss and Associates, Architecture and Planning, filed a lawsuit in Pitkin County District Court in July, claiming that DeGraff’s companies, Fun Worldwide LLC and Junk/Red Onion LLC, owed him $117,135.79 for work done in the empty space on the Cooper Avenue Mall.The general contractor, Hansen Construction, filed a lien in June against Junk/Red Onion LLC for $293,620.DeGraff didn’t return a phone call seeking comment.As the receiver, Otte & Cotte will maintain control of the Liquid Sky and Junk properties to prevent diminution, which could include operating them as bars and restaurants, or liquidate all assets associated with the businesses and DeGraff. Otte & Cotte will likely perform a feasibility analysis to determine whether the businesses should continue to operate, according to the court ruling.Otte & Cotte has the right to change the locks, alarm codes and security systems on the property, according to court documents.The receiver also will enforce collection of DeGraff’s accounts, debts and contracts, as well as settle mechanics’ liens filed against the property. The firm is authorized to apply rents, income, issues and profits collected by managing the property and assets, with first payment going to Otte & Cotte, which will be paid on a monthly basis for its services, according to court documents.Otte & Cotte has frequently acted as a receiver in Colorado district court matters, including Pitkin County, where the firm has been appointed 12 times.csack@aspentimes.com