Katz: Debt won’t close deli

Backed-up bills lead to a sec­ond bank­ruptcy fil­ing

Austin American-Statesman - - METRO & STATE - By Lay­lan Copelin

Austin deli owner Marc Katz has ex­pe­ri­enced the highs and lows of the news me­dia’s at­ten­tion the past eight days.

Last week, CNBC broad­cast from his West Sixth Street res­tau­rant as part of its study show­ing that the Texas econ­omy is the best in the coun­try. On Thurs­day, Katz was stand­ing in the mid­dle of his res­tau­rant ex­plain­ing why he had filed for Chap­ter 11 bank­ruptcy pro­tec­tion for Katz’s Deli & Bar, the res­tau­rant he’s run for more than 30 years.

“It’s busi­ness as usual,” Katz in­sisted. “I’m not be­ing evicted, and I’m not go­ing out of busi­ness.”

But the two-time politician said he might move the deli from 618 W. Sixth St., where he’s been in busi­ness since 1979, if he can’t work things out with his land­lord.

“I’m look­ing right now,” he said. “I’m open to any­thing.”

Tommy Rea­gan, one of the part­ners who have owned the build­ing since 2007, said they have been try­ing to work with Katz even as he fell be­hind in his rent.

“We’ve bent over back­wards to help

him stay in busi­ness,” Rea­gan said. If the res­tau­rant moves, he said, it will be Marc Katz’s de­ci­sion.

Ac­cord­ing to court records, M&M Katz Inc. and sev­eral re­lated busi­nesses owe $227,637 to the In­ter­nal Rev­enue Ser­vice; $56,457 in sales and mixed bev­er­age taxes to the state; $11,367 in un­em­ploy­ment taxes; and $1,956 in prop­erty taxes to Travis County.

Katz sought the court’s per­mis­sion to pay al­most $29,000 owed to about 55 em­ploy­ees.

In­cluded in the court records was a bud­get that shows the Katz busi­nesses gen­er­ate monthly sales of $225,923. Af­ter sub­tract­ing var­i­ous ex­penses, in­clud­ing his $5,400 salary, there is only $3,270 left over each month. The rent comes to $22,478.

Katz likened his prob­lems to the “usual ups and downs of a small busi­ness.”

In 2001, Katz sued his son, claim­ing he wrongly fun­neled money from the Aus- tin res­tau­rant to a new one in Hous­ton. His son de­nied any wrong­do­ing. They set­tled the next year, but the cost of the set­tle­ment con­trib­uted to Katz’s first Chap­ter 11 fil­ing, in 2004.

Katz, a tire­less pro­moter for his 24hour res­tau­rant, tried twice to pro­mote him­self into elected of­fice. He ran for Austin mayor in 2003 and for lieu­tenant gover­nor this year be­fore los­ing in the Demo­cratic pri­mary.

On Wed­nes­day, Katz blamed him­self for his lat­est busi­ness prob­lems.

“I don’t think I paid enough at­ten­tion,” he said. “I took my eye off the ball.”

Katz didn’t use his trade­mark phrase — “Katz’s Never Kloses” — but that was the sen­ti­ment he expressed. He said the bank­ruptcy pro­tec­tion will give him time to right him­self and his busi­ness.

“You don’t go 30 and a half years and then wipe out,” Katz said. “This is a fam­ily busi­ness. We’re just not walk­ing away.”

‘I don’t think I paid enough at­ten­tion. I took my eye off the ball.’

Marc Katz

Owner of Katz’s Deli & Bar

Marc Katz says he is look­ing for a new lo­ca­tion.

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