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Restaurant files for Chapter 11

Rochester Business Journal
December 13, 2013

The Fruit & Salad Co. Inc. has asked for court protection from creditors.
 
Once the operator of a popular downtown Rochester lunch spot, as well as locations at Eastview Mall and Midtown Plaza and a restaurant at the Rochester Museum & Science Center, the Fruit & Salad Co. now has a single location in Perinton on Route 96 in the Bushnell's Basin area.
 
The restaurant's offerings are similar to fare served at its former locations: a lunch buffet featuring soups and salads and a dinner menu offering modestly priced entrees and table service. The eatery also has a catering service.
 
The Fruit & Salad Co. will reorganize successfully, predicted the restaurant's bankruptcy attorney, David Stern of Elliot Stern Calabrese LLP. The eatery's problems largely stem from downsizing pains suffered as it contracted from a local chain to a single location, he said.
 
The restaurant's Midtown Plaza location was lost when the plaza closed, and the State Street location's fortunes declined along with downtown, Stern said. A further blow was closure of the Eastview location after its space at the upscale Ontario County mall became unavailable.
 
As what was once "a reasonably good-sized restaurant chain" shrank, indebtedness carried over from past obligations as a larger organization was harder to handle, he said. But the remaining Route 96 location is drawing crowds and doing well enough to stabilize the restaurant operation.
 
The partially completed Chapter 11 petition filed Dec. 6 in the Rochester Division of Bankruptcy Court for the Western District of New York does not state the eatery's assets and liabilities.
 
Filed under the Fruit & Salad Co.'s corporate name, PB&J Bryant Inc., the bankruptcy petition lists $135,636 owed to Canandaigua National Bank and Trust Co., $77,000 in business debt owed to Positive Environments, an Anderson Avenue interior design firm, and $72,000 owed to Direct Capital Corp. as the restaurant's three largest unsecured debts.
 
Documents filed with the Monroe County clerk show that CNB and Direct Capital, a New Hampshire equipment-leasing firm, have obtained judgments against the Fruit & Salad Co. in the amounts cited in the restaurant's bankruptcy petition.
 
Stern said he believes the Direct Capital judgment does not apply to equipment in use at the Fruit & Salad Co. but to a previous restaurant venture. CNB "has been really great" and is working with the company owners, he added.
 
In addition to PB&J Bryant, the CNB and Direct Capital judgments, filed in March and May, each personally name Patricia and Robert Bryant and Joshua Inc., the former corporate owner of Hicks & McCarthy Inc., a popular eatery in the village of Pittsford that the Bryants sold to new owners in 2011.
 
State records list Patricia Bryant as CEO of PB&J Bryant and Robert Bryant as CEO of Joshua Inc.
 
A $50,000 state tax obligation is the fourth-largest unsecured debt listed in the restaurant's bankruptcy petition. Court records show four separate state tax warrants filed against PB&J Bryant; none of the tax judgments is listed as satisfied.
 
The tax arrears would not hobble the Fruit & Salad Co.'s reorganization, Stern predicted.
 
"What happened is other creditors got in line ahead of the taxes. That's part of the reason for filing the Chapter 11," the attorney said.
 
Filed in 2010 and 2013, the PB&J Bryant warrants in total list some $48,000 in taxes as having been due in 2009, 2010 and 2011. Fines and penalties bring the amount the state tax authority seeks from the restaurant corporation to approximately $67,000.
 
Robert Bryant pleaded guilty in August 2012 to 21 felony counts, including criminal tax fraud and grand larceny, stemming from PB&J Bryant's and Joshua Inc.'s failure to turn over more than $196,000 in taxes the restaurants had collected.
 
After serving 32 days in weekend stints at the Monroe County Correctional Facility in a work program, Bryant was sentenced this year to five years of probation in a plea deal worked out with then-Monroe County Court Judge Frank Geraci. Geraci had ordered Byrant to repay the stolen tax receipts in 2012 when Bryant submitted a plea.
 
Stern said he was not sure where Bryant stands on the restitution order.
 
In September, state tax authorities filed a warrant naming Patricia Bryant as personally liable for a tax bill of $611,701.92. The warrant, which does not name PB&J Bryant, Joshua Inc. or Robert Bryant, cites some $186,000 allegedly owed for taxes due in 2010. Fines and penalties make up the balance.
 
"There might be some sort of mistake involved," Stern said. "I'm not sure she owes that."

12/13/13 (c) 2013 Rochester Business Journal. To obtain permission to reprint this article, call 585-546-8303 or email service@rbj.net.



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