Odyssey Diner, a fixture in Eastchester for 50 years but dormant since the beginning of the Covid-19 pandemic, has filed for Chapter 11 bankruptcy protection is holding out the possibility of reopening.
But Odyssey’s landlord opposes those plans, alleging that the owner has gutted the building and sold assets without accounting for the funds.
Estiatorio Ent. Ltd., the company that operates the diner, petitioned U.S. Bankruptcy Court in White Plains on Nov. 30, declaring $3,000,348 in assets and $417,092 in liabilities.
Estiatorio’s owner, Konstantinos Doukas, says in an affidavit that his family has served wholesome family-style food for 50 years at 465 White Plains Road, Eastchester.
“For the most part,” the diner operated at a profit and paid its obligations, he says, but in March 2020 he shut it down because of government restrictions enacted in response to the Covid-19 pandemic.
He planned to reopen quickly but various circumstances made that goal unfeasible.
Doukas has applied for a Restaurant Revitalization Fund grant that he would use to reopen the diner. Alternatively, he says, he would sell the building and reopen at another location.
While Doukas’ company owns the building, it does not own the land, instead renting from Stacey Realty Associates, New Rochelle.
But Philip DeRaffele of Stacey Realty, says the building automatically transferred to the landlord when Doukas defaulted on lease payments.
He says in an affidavit that Odyssey Diner owes Stacey $418,082: including $286,000 in rent and $132,082 in real estate taxes. Under the terms of the lease, Doukas had to surrender title to the building if he failed to cure a default, but has refused to do so.
What’s more, according to the landlord, Stacey is by far the largest creditor but bankruptcy schedules list the debt as disputed and the amount as unknown.
The greatest debt listed is $250,000 to Doukas for advances that he made to the business.
Even if Doukas still had a legitimate title to the building, DeRaffele claims, the building is not worth the $3 million that is claimed in bankruptcy schedules.
Within months of closing the diner the building was gutted, according to DeRaffele. All furnishings and equipment, even HVAC systems, ceiling tiles “and seemingly any other property that could conceivably be taken out,” were removed and sold.
No portion of the proceeds were paid to the landlord, DeRaffele claims, and were “presumably retained” by the business.
He claims that the Chapter 11 reorganization petition was filed in bad faith and he is asking the court to convert the case to Chapter 7 liquidation, on the grounds of gross mismanagement and in the best interests of creditors.
Doukas argues in his affidavit that allowing Stacey to “seize possession” of the building will allow the landlord to “receive a windfall at the expense of the debtor and its creditors.”
The Odyssey is represented by White Plains attorney Anne J. Penachio. Stacey is represented by Manhattan attorneys Douglas J. Pick and Eric C. Zabicki.
