The posh Union Trust steakhouse, which opened at 717 Chestnut St. in early 2009 amid the Center City steakhouse boom, filed for bankruptcy protection Thursday, March 31. (The news was first reported on Foobooz.com.)
The steakhouse company's two current officers -- Joe Grasso and Garrett Miller, both founders -- told me that the business will remain open.
In an interview, Grasso and Miller said Union Trust is stronger than it has ever been, that financial controls have finally made it profitable, and that the filing was intended to "bring order to a chaotic situation." In other words, to ask U.S. Bankruptcy Court to arrange what they call a "fair" repayment schedule for banks, investors, and companies involved in the construction and to "take the emotion out of it."
They said that they are up to date with suppliers and vendors, who at one point were owed $80,000.
"The business is the golden goose," Miller said. A reorganization plan, he said, "will remove the noose from the golden goose."
Grasso and Miller did not say how much is owed. The court filing did not state assets or liabilities. On Friday, a bankruptcy judge demanded the information in a timely manner. Common Pleas Court's records are full of filings, naming as defendants such corporations as Walnut Street Capital and WSC 717 Associates.
Whispers about Union Trust's financial health have surrounded the project almost from its inception in 2007. Anticipated PIDC financing fell through shortly before opening, the men said.
It opened in early 2009 in a soft economy and in a beef market made even tougher by cross-town competitors Del Frisco's and Butcher & Singer.
In September 2010, Grasso and Miller assumed sole control of the restaurant from a previous limited-liability company whose members, at one time or another, included Terry White, Ed Doherty, John Dunfee, and John Frankowski, all of whom helped conceive the restaurant. They are no longer involved.
On Saturday, White told me that he was illegally shut out in 2009. Grasso and Miller said that was not the case. White said he expects litigation to follow, as he said he was never paid out or indemnified. His home, used as collateral on two loans, is on the line, he said. "It's going to be dirty, nasty ugly," White said.
"As owner of the building, I had to take over the business," said Grasso, a developer. "I have the majority of the investment. As the partnership sank deeper into debt, it was clear to us that it wasn't going to survive."
N.B. Grasso and Miller's pub project, American Oak, in the spot at 15th and Sansom Streets previously occupied by Roy's, is on hold. Miller says they are entertaining offers from other restaurant groups, though Grasso says the design work is being done. If American Oak doesn't open there, Grasso says, it will open somewhere else. Meanwhile, a club called Rumor -- run by Mark Marek -- is being built in the building's basement.