Bankruptcy bites 7 Il Mulinos
Celebrity-magnet Hamptons restaurant Il Mulino and six other outposts of the glamorous Italian eatery empire have filed for Chapter 11 bankruptcy—the latest big dining-world name victimized by the COVID-19-pandemic.
Il Mulino owner Jerry Katzoff said the step was needed to prevent lenders from trying to take over the trendy tr at tori as following a loan default. Besides the Water Mill location, a favorite of stars such as Jimmy Fallon and Bethenny Frankel, the other Il Mulinos in the Chapter 11 case filed in New York are in Roslyn, LI, Las Vegas, Miami,Atlantic City and Puerto Rico.
The filing does not involve the five Il Mulinos in the city, which include the West Third Street original, as well as spots on the Upper East Side and in Tribeca, or outposts in Nashville, the Poconos, or Orlando and Boca Rat on in Florida.
“They were not parties to the loan and are completely not affected,” Katzoff emphasized.
Katzoff and his partners are battling New York-based lender BSP (Benefit Street Partners) over a $35 million loan credit agreement, including interest, signed in 2015 for the seven Mulinos outside the city. Tensions arose a few years ago when Katzoff wanted to launch new locations around the United States. The expansion was needed to help pay off the loan, which was due in June 2020, he said.
BSP was expected to fund the growth through a $9 million credit line, but only dribbled out small amounts over time, causing a liquidity problem and operating difficulties over five years, the filing says.
The hammer really fell when the coronavirus shut down all the restaurants in March. With encouragement from BSP, they secured $2.3 million in federal Paycheck Protection Program funds to help tide them over. But then, Katz off said, B SP abruptly signaled it wanted to take over the seven restaurants in a “debt-to-equity conversion play.”
“They were working with us until the corona virus hit and they became concerned about their collateral ,” Katz off said.
BSP lawyer Michael Goldstein of Procter Goodwin didn’t immediately respond to a request for comment.