Sunset Partners Inc., the parent company of popular Boston University eateries Sunset Cantina and Sunset Grill & Tap, filed for bankruptcy. The restaurants will continue to pour beer and sling food for hungry university students while the company reorganizes its debt.
The decision to seek bankruptcy protection comes as fears mount over whether or not the Department of Revenue is going to seize the restaurants for failing to pay nearly $500,000 in back taxes. The company also listed $5.67 million in debt and $1.06 million in assets.
Speaking about the company’s debt and bankruptcy protection, David Madoff, the company’s lawyer, said, “What [the bankruptcy] means essentially is the businesses will continue to operate, and in the next several months, we will be putting together a plan to restructure the company’s debt to move forward.”
The chapter 11 petition for relief allows Sunset Partners a 120-day “exclusivity period,” during which it will move ahead with a plan to reorganize operations. Madoff maintains that Sunset Partners’ debt is not related to a lack of popularity at the restaurants. The mountain of debt occurred when the current owners, Marc Berkowitz and Ara Balikian, purchased the two Sunset locations from founder Marc Kadish and remodeled.
“The debt was mostly incurred in connection with the current owner’s purchase of the business back a few years ago,” Madoff said. “They’ve been trying to restructure the restaurant since then, and [the bankruptcy] is just a step in that process.”
Berkowitz and Balikian initially invested in the business because of the financial struggles it was facing. The two owners understood the business and wanted to try and turn it around financially.
Despite their desire to make Sunset a going concern, Madoff conceded, “I didn’t know that they planned on filing a bankruptcy. I don’t think they planned that.”
The company hopes to work with its creditors to turn itself around. The business’ biggest creditor is Hamilton Realty, Sunset’s landlord, which is owed $4.2 million.
“[Sunset Partners is a] very good operation providing a very good product to the local community,” said Carl Valeri, Hamilton Realty’s president and chief operating officer. “We believe the reorganization will make them even a better operator. As landlord and secured creditor, we have faith in the system and understand the outcome will be productive for all parties involved.”
Founder Marc Kadish first opened Sunset Grill & Tap in 1988, followed by Sunset Cantina on the western half of Boston University’s campus in 2001. Balikian and Berkowitz bought the restaurants in 2014.
“Sunset files for bankruptcy protection amid financial issues,” The Daily Free Press, June 14, 2017.