Flamboyant restaurateur and failed mayoral candidate Marc Katz agreed to a Chapter 11 Bankruptcy plan last week that may ensure Katz's never closes.
After the settlement, Katz will spend the next 15 years paying approximately $6 million in debt.
Katz filed for bankruptcy protection in November 2004 because of "huge fixed debt and lawsuits with my son," which made running his business, Katz's Deli and Bar, difficult, he said.
"We basically restructured our loans," Katz said.
According to Katz, while business was difficult to operate, the bankruptcy case didn't affect his guests, and service went on as usual.
"My guests and staff were very supportive," Katz said. He said his employees still got paid, but he owes about $70,000 in federal tax withholding from employee paychecks. "The money owed to the IRS is money I owe, not my employees," he said.
Much of Katz's debt is owed to creditors, advertisers and companies involved with delivering the food served in his restaurant. Katz owes more than $72,000 to Sysco Food Services of Austin, more than $40,000 to MQ&C Advertising and Marketing, and as little as $700 to Odwalla Juice, according to court documents. Nearly 90 claims were made in court for money that Katz owes companies, only three of which were disputed, according to the documents.
A bulk part of Katz's debt is the nearly $900,000 he owes his son, Barry Katz. The elder Katz says he gave his son half of the ownership in Katz's Deli and Bar. His son then opened another Katz's Deli and Bar in Houston. Because of a conflict in where the business' money was going, he decided to buy back the other half from his son for $1 million after a lawsuit. His son still owns the Houston version of the restaurant.
The bankruptcy case will not affect his other company, Marc Katz Deli Foods, which supplies food to restaurants and grocery stores. Earlier this summer, Katz announced he will be opening an upscale gay club in downtown Austin.
Even after filing Chapter 11, Katz is confident his 26 year-old restaurant will continue to hold strong.
"Katz's never closes, and I mean it," he said.
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