Four months after a bankruptcy judge threw N. Peter Olsen out from behind a court shield, the Van Dyck Restaurant & Brewery owner has jumped back into the bankruptcy system in a last-ditch effort to keep his landmark Schenectady business.
Electric City Brew Pubs, Olsen’s company which owns the Van Dyck, filed Monday for Chapter 11 reorganization. The filing stayed an auction for the restaurant that was scheduled for Wednesday morning at Schenectady County Court.
The filing will hinder the efforts of the Schenectady Metroplex Development Authority and Berkshire Bank to collect on two loans they made to Olsen totaling $525,000.
Olsen said he filed for bankruptcy protection so that he could finish work on a new model aimed at making the business solvent and able to pay off the debts of the Van Dyk. He said he’s negotiating a new business model that fits within the goals of Metroplex.
“I’ve been working to get loans in place,” he said Wednesday evening. “Basically, I got crunched for time with the auction.”
Olsen said he plans to use the equity remaining in the business to fund a new venture at the Van Dyk.
Though declining to elaborate, he said the new model would focus on paying off his debts while keeping the business viable.
“I want to get people paid up, get the place back on track, and get on with my life,” he said
Monday’s bankruptcy filing threatens to rekindle the nearly yearlong legal battle creditors waged after Olsen personally filed for Chapter 11 protection in March 2007.
It came two months after Metroplex foreclosed on the famous Union Street jazz club and eight days after Olsen closed the Van Dyck.
Given that the restaurant has remained closed since then, Metroplex Chairman Ray Gillen questioned Electric City’s applicability under Chapter 11. Businesses usually use Chapter 11 to keep creditors at bay while operations are reorganized.
“He doesn’t have a going concern. … It’s hard to see how a plan of reorganization for the business would make any sense,” Gillen said.
U.S. Bankruptcy Court Judge Robert Littlefield in August refused to block Berkshire Bank’s attempt to foreclose on the Van Dyck. Olsen had defaulted on a $250,000 loan from the Pittsfield, Mass., bank, along with a $275,000 loan from Metroplex.
In January, Littlefield rejected Olsen’s personal Chapter 11 disclosure statement, which outlined his plan for reorganization.
Two months later, the judge in Albany tossed Olsen’s reorganization case, exposing him to creditors who were lining up to foreclose on his properties in Schenectady, Saratoga and Washington counties.
Olsen last year attempted to use his personal Chapter 11 case to protect the Van Dyck from creditors. It was his attempts to keep the jazz club running that dragged him into deep financial problems.
On Wednesday, both the Van Dyck and its parking lot would have been put to auction had Electric City not filed for Chapter 11. The jazz club is valued at more than $1 million and the parking lot is valued at $100,000.
After the auction, Metroplex would have moved to auction off the building’s contents. Gillen said a Colorado man was very interested in the Van Dyck’s brewing equipment.
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