A new venture from a Rye catering business has filed for bankruptcy citing setbacks at its Florida location.
Meso Delray LLC reported $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 in White Plains.
Meso Delray operates as Meso Beach House in Delray Beach, Florida.
B Conscious Hospitality, based in Rye in the same location as the Meso Rye restaurant at 22 Elm Place, is majority owner of Meso Delray.
Both restaurants offer Mediterranean cuisine.
Meso Beach House opened its doors last December, during what is called high season in Florida. But now he’s in trouble, according to an affidavit from B Conscious majority owner Alan Schoening of Westport, Connecticut.
He rented the site of a former Argentinian steakhouse at a prime location along the Intercoastal Waterway, installed a new roof and air conditioning, got rid of mold, and created a 300-seat restaurant.
But Meso Rye and Meso Delray borrowed $1 million to be used mostly for initial landlord payments, including $571,000 in “key money” — a kind of deposit to secure a lease — and a $100,000 security deposit. .
Key money left insufficient working capital, Schoening said. He also had to spend $750,000 to renovate the new restaurant. And now it’s summer off-season, when income drops by up to 50%.
The company also borrowed nearly $1.6 million from individuals to supplement the $1 million loan, he said, and most of it was spent on improvements.
Manhattan restaurateur Bobby Khorrami is a joint debtor.
Meso Delray is one month behind on its lease obligations, four months behind on state sales taxes and is current on $1 million loan payments, Schoening said. But the lender declared a default for allegedly breaching the loan agreement for taking on more debt.
Schoening said his goal was to use the bankruptcy to hold off creditors and get some breathing room while the company formulates a reorganization plan. Meso Beach House intends to continue making rental and loan payments, he said, and to secure new financing so it can “survive the low summer season.”
Alternatively, he said, Meso Beach House would be put up for sale.
Harrison’s bankruptcy attorney, H. Bruce Bronson, represents Meso Delray.