The owners of the Crystal Ristorante have filed for Chapter 7 personal bankruptcy protection in federal court following foreclosure proceedings against the landmark eatery on Lyon Street.
The foreclosure was scheduled to occur Monday, but was postponed by the bank that holds the mortgage on the restaurant, said Ken Rose, director of the Montgomery County Industrial Development Agency. The IDA also has a financial interest in the restaurant.
Anthony and Carolyn Centi filed a voluntary petition April 17 with the U.S. Bankruptcy Court of the Northern District of New York. The couple cited $1.9 million in claims against them and less than $1 million in assets. Their petition states that $1.2 million of the $1.9 million in claims is unsecured.
Anthony Centi said Monday he was open for business and that he and the bank are in negotiations. “No foreclosure has been posted yet,” he said. “Sometimes things like this could take years. We are open for business. Nothing has changed.”
According to the petition, the Centis owe $1.7 million to Ciena Capital, also known as BLX Capital, of New York. The Centis borrowed approximately $1.2 million in 2004 to add a banquet hall onto the bar and restaurant, securing the loan with the property. The $1.7 million amount reflects interest, principal and penalties for defaulting on the loan, according to local economic development officials.
The Centis also owe the Montgomery County IDA $110,000, secured against their restaurant equipment. The IDA recently obtained a judgment against Anthony Centi for defaulting on the loan.
The Centis borrowed the money from the IDA to refinance unsecured debt and provide “working capital to allow better cash flow to expand the business opportunities,” according to IDA records. The revolving loan was made to retainthe equivalent of 20 full-time positions within three years, a goal it met. Centi said the business currently has 40 full- and part-time employees.
Further, the Centis owe approximately $15,000 in back city and school taxes to Montgomery County.
According to the Centis’ attorney, Richard Croak, the Chapter 7 will protect the couple from having to pay any creditors seeking to recover additional money once the restaurant is sold through foreclosure. The action protects their personal assets, such as their home, from having to be sold to satisfy debts, he said.
Their Chapter 7 petition states the restaurant, which is under Anthony Centi’s name, has a declared real property value of $611,000. The petition further states the restaurant is an insolvent corporation with zero dollar value. The petition also states the restaurant equipment and fixtures have a value of $50,000.
Rose said his agency disputes the petition’s declared value of the restaurant equipment. He said when IDA loaned the Centis the $110,000, it was fully secured against the restaurant equipment. The IDA has hired an independent appraiser to determine the value of the restaurant’s equipment. Rose said it is likely Ciena Capital will also contest the petition’s declared value of the restaurant property.
If the IDA and the bank can establish higher values on the assets than listed in the petition, then they may be able to recover their loans at full value, Rose said. This would require the Centis to sell their assets.
“We will proceed with next level and try and remove the equipment,” Rose said.
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Categories: Schenectady County