By Tracy Record
West Seattle Blog editor
The company that’s expected to open The Lodge Sports Grille in The Junction, first announced a year and a half ago, has filed for Chapter 11, and it’s not the first such filing for its owner.
The Lodge’s current locations remain open, and Lodge owner Shawn Roten tells WSB tonight via e-mail that the year-and-a-half-in-the-works West Seattle restaurant/bar could be just one week away from opening: “The West Seattle Lodge opening date is planned for next Friday as long as the fire alarm integration can be completed and signed so we can get our final inspections! The filing of Chapter 11 tax reorganization will not affect any other part of our business. Our vendors and suppliers are all current and the filing is only meant to allow our tax debt to be structured into payment terms.”
The Chapter 11 filing by Lodge Holdings Company lists 10 DBAs including West Seattle Lodge and locations in Downtown, Kirkland, Greenwood, the Stadium area, Mill Creek, Mukilteo, Sammamish, and Renton. It was first reported Wednesday by The Seattle Times, whose story says Renton is also an opening-soon location. Several WSB readers sent us the link, and we have been looking into it since then, including obtaining all the documents filed so far, via online US Bankruptcy Court files.
Documents show the filing is a voluntary Chapter 11 bankruptcy (explained here). In those documents, Lodge Holdings Company reports $1,067,495 in assets including current inventory and $5,738,900 in liabilities, including four government claims described as “disputed” – a $1,950,000 tax lien from the Internal Revenue Service, a claim for $860,900 attributed to DHS/ICE Investigations, a $750,000 claim from the state Department of Revenue, and a claim for $88,000 from the state Department of Labor and Industries.
A document filed by the state Attorney General’s Bankruptcy and Collections division says another company owned by Roten and his wife Elizabeth Wright, Wrought Corporation, filed for Chapter 11 in 2009, but that the petition was dismissed, and followed by the couple’s personal Chapter 11 filing, which “quickly converted to Chapter 7” (explained here). Bankruptcy Court files say the Chapter 7 case was closed in early 2010. Meantime, the state says claims filed in the Wrought case included “approximately $300,000 of unpaid sales tax” which a state Department of Revenue agent details as $307,629 in sales and business/occupation tax, plus $104,622 interest and $169,196 in penalties, and that Roten has paid almost $30,000 of that via $500 monthly payments since June of 2011.
Another filing in the new case from the state Attorney General’s office, arguing either a trustee must be appointed in this case or it should be dismissed, says in part, “The tax debt herein is of a magnitude rarely seen in this court … Given the prior tax history of a Roten-controlled entity and sheer magnitude of the debt herein, it is fair to conclude that Roten’s filing demonstrates a clear and concerted pattern of tax abuse.”
A hearing on whether to appoint a trustee or dismiss the case is set for December 23rd.
In the response to our e-mail inquiry tonight, Shawn Roten added, “We are very excited for our West Seattle location to open! Our family of employees are looking forward to serving the community of West Seattle. Our hope is that the negative publicity regarding the Chapter 11 filing doesn’t negatively affect the efforts and hard work The Lodge crew is doing to reorganize and make our business stronger for our guests and our employees. I have pledged to our family of employees to do a better job of managing this very special business and have brought in the proper advisors to do so. We will continue to give our guests the experience they deserve at one of the most unique custom built northwest bars in Seattle.”
The Lodge Sports Grille was first announced a year and a half ago as a tenant coming to the mixed-use Junction 47, in the easternmost of its two buildings. When we talked again with Roten 14 months after the announcement, he said the permit process had taken far more time than expected (something we have often heard from people opening new businesses in the past few years).