Foreclosure suit hits Old Town bistro
(Crain’s) — The recession continues to dish out challenges for local restaurants, as a French bistro in Old Town faces foreclosure and two small Asian eateries in the Randolph Street restaurant district have filed for Chapter 11 bankruptcy protection.
On the Near North Side, Bistrot Margot at 1437 N. Wells St. owes about $1.5 million on five past-due loans, according to a complaint filed by Associated Bank on Sept. 29 in Cook County Circuit Court.
Meanwhile, on the Near West Side, Izumi Sushi, a sushi and sake bar, and Jim Ching’s, a sister restaurant that specializes in Chinese takeout, filed for protection from creditors, with each venture listing assets of $1 million or less against debts of $10 million or less, according to petitions filed Nov. 30 in U.S. Bankruptcy Court in Chicago.
The financial troubles are new signs of tough times for local restaurateurs, says Doug Simons, a restaurant, bar and nightclub broker with Chicago-based Simons Restaurant Exchange.
“You don’t see that many shuttered restaurants,” he says. “But what you’ll learn anecdotally is that while restaurants may be full, people are spending less money per person.”
Bistrot Margot, owned by chef Joseph Doppes and his wife, Ann, did not pay off the loans by July 1, after the expiration of a forbearance agreement that gave the Doppes additional time to work things out, according to the complaint.
The loans were issued for a total of $1.87 million from August 2003 to February 2009. In addition to Bistrot Margot II Inc., the foreclosure case also lists as a defendant the Doppes-owned venture that owns the Wells Street building, which is 5,230 square feet including the apartment units above the restaurant, according to real estate data provider CoStar Group Inc.
Bistrot Margot has become a neighborhood fixture since it opened in 1999. Mr. Doppes blames the restaurant’s financial woes an ill-timed attempt to open a suburban location, rather than the recession.
In summer 2005, Mr. and Mrs. Doppes opened another restaurant in downtown Naperville, but shut down the location at 216 S. Washington St. in November 2006.
Mr. Doppes says the Old Town restaurant will not shut down as he continued to hold talks with Associated Bank to restructure the loans, declining to comment on specifics.
The Old Town location, named after his daughter, is faring better than many of its rivals, he says. The restaurant’s average entrée is about $21, making Bistrot Margot more moderately priced than some of its competitors offering bistro food.
“All things considered, we’re blessed,” he says. “We’re not struggling as much as others.”
A lawyer for Green Bay, Wis.-based Associated Bank did not respond to requests for comment.
Although independent restaurateurs lack the financial resources to survive a steep decline in business, they typically have one advantage that the big chains lack — lower overhead costs. Family-owned restaurants usually save on management expenses because of their hands-on involvement and are willing to put less money in their own pockets to help steer the business through a recession, he says.
Meanwhile, on Randolph Street, two Asian restaurants backed by restaurateur Robert Farnik filed for Chapter 11: Izumi Sushi and Jim Ching’s at 731 and 735 W. Randolph St. Both restaurants apparently remain open. The attorney for the two ventures did not return a phone call seeking comment.