La Cremaillere has wine worth nearly $1.3 million in its cellar in Bedford, but not much else to keep the famed French restaurant financially afloat.
La Cremaillere petitioned for Chapter 11 bankruptcy protection on April 17, declaring nearly $1.4 million in assets and more than $2 million in liabilities.
As recently as September, the owners had expressed optimism when Meyzen Family Realty Associates, the company that owns the property and leases it to the restaurant, filed for Chapter 11 bankruptcy to protect the property from foreclosure.
They were close to refinancing the property, co-owner Barbara Meyzen said, and just needed “a few months breathing room” to finish the deal.
“The restaurant is experiencing an upsurge in business,” she stated, “which will allow it to begin paying rent once again.”
But in February, Celtic Bank Corp. of Salt Lake City informed bankruptcy court in White Plains of a possible “doctored document” and asked permission to continue with foreclosure, including a claim on the wine collection.
“The debtor has repeatedly provided fraudulent documents to Celtic Bank,” attorney Dawn Kirby stated in a motion to modify the automatic stay on collecting debts.
“It is clear,” she said, “there is no hope of reorganization for this debtor.”
La Cremaillere, housed in a 1750s farmhouse on Bedford-Banksville Road, on the Connecticut border, has developed a reputation as an exemplar of fine French country cooking, under Robert Louis Meyzen in the 1960s, and later by his son and current co-owner, Robert Olivier Meyzen.
The restaurant began to struggle during the 2007-08 recession, Barbara Meyzen stated in a September bankruptcy court filing, “which made it difficult to pay the mortgages.”
The Meyzens, of Redding, Connecticut, had mortgaged the property to Celtic Bank in 2013, to secure a $900,500 promissory note on a Small Business Association loan, and to their niece, Judy Smith, of Fort Worth, Texas, for a $155,000 loan.
Celtic filed for foreclosure in 2017.
Smith sued in February 2018, claiming that her signature had been forged on a satisfaction of mortgage document filed with the Westchester County Clerk in 2017.
She asked the court to nullify the release, reinstate the mortgage and award her $50,000 in damages.
When Meyzen Family Realty filed for Chapter 11 bankruptcy in September, the petition automatically froze collection of debts, to enable the company to reorganize.
The Meyzens declared $2.8 million in assets – the value of the 3.75 acres and the farmhouse-restaurant – and $1,450,000 in liabilities – including $1.2 million owned to Celtic Bank and $250,000 to their niece.
In February, a Celtic Bank attorney, Erica R. Aisner, questioned the veracity of a document filed by Meyzen Family Realty, and cited a record of dodgy documents.
“Suspicions run high,” she said, when the debtor has provided documents that show payment of property taxes that were not paid, issued checks on an account with insufficient funds, provided nonexistent postal service receipt numbers to prove that payments were sent, and provided an insurance document “to show insurance was in place when it clearly was not.”
Two months later, La Cremaillere filed for bankruptcy protection. The new petition lists claims of $1,376,407 by Celtic Bank and $225,564 by L.J. Smith Investments LP but shows both as disputed.
The largest unsecured claim is $423,000 by the Internal Revenue Service, and is also listed as disputed.
Meyzen Family Realty has an agreement with The Lewinstein Family Trust of University Heights, Ohio, to loan nearly $2.7 million, according to the company’s attorney, H. Bruce Bronson of Harrison, in a response to Celtic Bank filed on March 4.
The new financing, he said, “can be put into place rather quickly and Celtic and other creditors of debtor can be repaid and the bankruptcy successfully concluded.”