Friend House, an Asian restaurant and lounge that brought in a weekend party crowd, has closed amid a bankruptcy filing, lawsuits, and mounting debt. The deathblow came Monday when a city marshal turned possession of the space over to the landlord.
The eatery at Third Avenue and 13th Street applied for Chapter 11 bankruptcy protection last June, court papers show. At the time, it cited $675,995 in liabilities, including over $491,200 in rent arrears, more than $86,206 owed to Renaissance Development Corp., and smaller debts to food and wine vendors. According to papers filed last week, the company also owes about $87,000 to the New York State Department of Taxation and Finance and about $24,000 to the city Department of Consumer Affairs.
A woman who answered a phone number belonging to the restaurant’s owner Jin Hua Lin but who declined to confirm her identity said she fell behind on rent because the building’s management company reneged on an oral agreement to charge her a reduced rent of $21,000 per month, an amount she said she paid consistently; last year, she said, the company told her she should have been paying the full rent all along and demanded she pay the balance. Financial records belonging to Solil Management indicate the base rent was $26,780 in 2008 and eventually went up to $29,263.
“I kept my promise of $5,000 every week, but they didn’t keep their promise,” she said, adding, “It’s very hard. At the rent at $30,000, nobody can make a profit. We lost everything.”
A rent collector at Solil Management who was said to have been involved in discussions about the agreement said the above allegations were untrue and said she had no further comment.
Financial records indicate the restaurant grossed a little over half a million dollars in 2010, but it wasn’t enough to pay the bills. In March, records show, the eatery took in $67,120 but incurred $66,209 in expenses – netting just a little over $911.
In February, a U.S. Bankruptcy Judge ruled that the landlord, 106 Third Ave. LLC, could take back the property, citing Friend House’s failure to keep up with its rent after the bankruptcy filing. Next month, the same judge will consider a motion to dismiss the bankruptcy case now that the restaurant has lost its lease.