A new venture by a Rye restaurant company has filed for bankruptcy protection citing setbacks at its Florida location.
Meso Delray LLC declared $2.8 million in assets and nearly $3.7 million in liabilities in a Chapter 11 petition filed June 24 in U.S. Bankruptcy Court, White Plains.
Meso Delray operates as the Meso Beach House in Delray Beach, Florida.
B Conscious Hospitality, based in Rye at the same location as Meso Rye restaurant at 22 Elm Place, is majority owner of Meso Delray.
Both restaurants feature Mediterranean cuisine.
Meso Beach House opened last December, during what is known as the high season in Florida. But now it is struggling, according to an affidavit by B Conscious majority owner Alan Schoening, of Westport, Connecticut.
He leased the site of a former Argentine steakhouse at a prime location along the Intercoastal Waterway, installed a new roof and air conditioning, remediated mold and created a 300-seat restaurant.
But Meso Rye and Meso Delray borrowed $1 million to use mostly for upfront payments to the landlord, including $571,000 in “key money” — a kind of deposit to secure a lease — and a $100,000 security deposit.
The key money left insufficient working capital, Schoening said. He also had to spend $750,000 renovating the new restaurant. And now it’s the summer off-season, when revenues decline by as much as 50%.
The company also has borrowed nearly $1.6 million from individuals to supplement the $1 million loan, he stated, and most of that was spent on improvements.
Manhattan restauranteur Bobby Khorrami is a codebtor.
Meso Delray is a month behind on its lease obligations, four months behind on state sales taxes, and current on the $1 million loan payments, Schoening said. But the lender declared a default for alleged violation of the loan agreement for taking on more debt.
Schoening said his goal is to use bankruptcy to hold off creditors and get some breathing room while the business formulates a reorganization plan. Meso Beach House intends to continue making lease and loan payments, he said, and to get new financing so that it can “survive the summer low season.”
Alternately, he said, Meso Beach House would be put up for sale.
Harrison bankruptcy attorney H. Bruce Bronson represents Meso Delray.
