Potential Buyer On Horizon May Resolve Legal Vise For The Longobardo Brothers
By Tina Traster
A popular Nyack restaurant that has been shuttered since the pandemic lockdown is up to its neck in legal trouble. Apart from not paying rent for several months at 173 Main Street, Joe & Joe is being sued for failure to make payments on a slew of leased restaurant equipment.
The suit, filed this week in Rockland County Supreme Court, alleges restaurateurs Joseph and Anthony Longobardo, owners of Joe & Joe in Nyack and Pearl River, are personally liable for more than $71,000 in payments due to California-based Leasing Innovations Inc. for ovens, refrigerators, ice makers, fryers, cabinets – essentially everything including the kitchen sink.
“The company failed to pay since March 2020,” said Innovation’s counsel Lloyd Feld. “On June 24th, we sent a demand letter for rent and late fees. They did not respond to the notice.” The suit also seeks $3,000 in attorneys’ fees.
Rockland Attorney Scott Ugell, who is representing Joe & Joe, concedes the brothers are in debt on the Nyack location but says a deal is close to being struck to sell the restaurant to a new buyer who would assume the obligations under the restaurant equipment lease agreement, in addition to satisfying an SBA loan, assuming the lease on the property and satisfying other creditors.
“There is a buyer,” said Ugell. “We’ve already done a deal in principle.”
The landlord, Gisondi Family Partnership Ltd, also has a security interest in the equipment, meaning Joe & Joe is prohibited from removing or selling the equipment without the landlord’s consent, according to Ugell.
“We’re hopeful there will be a sale but I have mixed emotions,” said Anthony Longobardo, Joe & Joe Eatery’s owner. “I’m emotionally tied to this place. It’s a family business. People were loving us but we were a young business and we had too many bills. Most restaurants tread water for the first three to four years and come out the other side. But COVID knocked us out.”
The four-year restaurant equipment-lease inked June 2018 called for total payment of $152,184, of which $29,361 was paid upfront. The restaurateurs were up to date on monthly payments of $2,670 through Feb. 2020, before the coronavirus pandemic turned the restaurant world upside down.
According the lawsuit, both brothers, along with their Pearl River restaurant, “unconditionally guaranteed” the lease payments, leaving each personally liable for the entire obligation.
Though it was struggling before the pandemic, closures like Joe & Joe are becoming all too familiar in Nyack, in the county, and in the nation. The volatility brought on by the shutdown, changes in public health guidance, openings and closings, state-mandated orders, not to mention the uncertainly lying ahead, is causing a shake-out of the most vulnerable restaurateurs.
Longobardo says the he still might make an attempt to revive Joe & Joe, if the deal peters out.
“Everybody’s trying hard,” he said. “Some are doing better than others. We never reopened after the pandemic because there was not a lot of business. Like everyone else, we’re struggling with this every day.”
The restaurant industry has experienced 100,000 closures tied to the coronavirus pandemic, according to the latest survey by the National Restaurant Association. That’s one in six restaurants. A recent survey shows 40 percent of restaurant operators say they are unlikely to stay in business six months from now if there are no additional relief packages from the federal government; trade group have sent letters to Congress and White House. They described a bleak outlook for restaurants.
The organization is asking Congress for the following: authorize a second round of PPP funding — with this round having “greater flexibility” for both operating expenses and payroll; tax deductions for expenses paid with PPP loans; expansion of the Employee Retention Tax Credit (ERTC) to help restaurants get support after a PPP loan has run out; and tax credits for added costs tied to COVID-19 related protective gear, equipment, supplies and training.
Tom Bené, president and CEO of the NRA, said in a statement. “Across the board, from independent owners to multi-unit franchise operators, restaurants are losing money every month, and they continue to struggle to serve their communities and support their employees.”
Read also…
Seasoned Nyack Restaurateur Opens The Henry Despite COVID Constraints