Attorneys for Iron Chef Jose Garces and a group of investors in three of his Philadelphia restaurants faced off in a U.S. Bankruptcy Court Monday, over Garces’s bid to file for bankruptcy.
Monday’s proceedings centered around Garces’s previous attempt to sell off his restaurants and settle debts owed to various suppliers, according to Philly.com. An investment banker involved with the attempted sale on Garces’s side testified that the Louisiana-based company Ballard Brands had initially offered $14 million to acquire Garces’s portfolio of restaurants (among other offers received).
But according to that banker, Jeff Manning, investors would not agree to the deal, which prompted Garces to file for bankruptcy protection a few weeks ago, resulting in Ballard Brands cutting the deal by more than half, to $6.3 million.
Attorneys for the three investors — Jim Sorkin, and Maria and Tom Spinner, who are attempting to block Garces from taking three specific restaurants into bankruptcy — gave a different version of the events, with lawyer Jason Spiro saying that Garces’s team never provided sufficiently detailed information to enlighten investors about the initial $14 million deal.
These three investors are in court hoping to remove Garces from control of three Philly restaurants: Amada, Tinto, and Village Whiskey. Those restaurants are among the 13 that would be sold off if Garces’s bankruptcy filing is allowed to proceed. Philly.com notes that in the event of bankruptcy, Garces’s investors would receive almost nothing, given the restaurant group’s $7 million debt to a Buffalo-based bank.
Sorkin and the Spinners argue that Garces needed to obtain their support in order to file for bankruptcy, and that Garces failed to do this. Garces argues that by re-arranging his shares in the company, he had the votes to go ahead with the bankruptcy, without those three investors’ support.