New York’s Tavern on the Green Trying Chapter 7 Bankruptcy

A public tag sale marked the final days of Tavern on the Green in New York City’s Central Park.

The landmark was once a glitzy hot spot that was well-known for being over-the-top, but now the owners are considering filing Chapter 7 bankruptcy. But before that can happen, creditors must settle a dispute over who owns the name.

Tavern On the Green closed on New Year’s Eve after finding itself in financial trouble. Before the tag sale, there was an auction to help cover $8 million in debt that featured chandeliers, a leaded glass ceiling and Tiffany glass.

Tavern on the Green filed for Chapter 11 bankruptcy in September wanting to reorganize, pay off creditors in that manner, and stay open.

However, trouble started brewing during the reorganization when legal issues arose over Tavern on the Green’s assets, according to BusinessWeek.

Now, Tavern on the Green is seeking to change its Chapter 11 filing to a Chapter 7 bankruptcy.

The only real asset of value is the Tavern on the Green name, and according to a motion by Tavern on the Green’s unsecured creditors, the city of New York has engaged in “pervasive pernicious conduct” that ran the creditors’ repayment efforts “into a brick wall.”

This motion was filed with the U.S. Bankruptcy Court in New York City. The city is disputing who owns the Tavern on the Green name with Tavern on the Green LP and LeRoy Adventures Inc., which represent the family that operated the tourist destination.

Tavern on the Green LP claims to own the name, and also claims that it is worth in the realm of $19 million. The city, conversely, claims that it owns the right to the restaurant name. Given that, the city doesn’t want the LeRoy family or LeRoy Adventures Inc. to use the name or license it outside of the original Central Park restaurant location.

Tavern on the Green was formed in 1934 by the commissioner of New York Parks, Robert Moses. In 1974, restaurateur Warner LeRoy bought the license for the name. His daughter Jennifer Oz LeRoy took over the business after he died in 2001.

Tavern on the Green was the second-highest grossing restaurant in the country last year. According to BusinessWeek, it brought in $36.2 million last year, $1.2 million of which went to New York City.

The creditors’ committee made the case that the reorganization should be changed to a Chapter 7 because there was not a business in place to reorganize. It also said that there was no “material advantage or ability at this point in time to liquidating under Chapter 11.” If they were to create a new restaurant on the site, the creditors’ committee made the claim that it would take up to two years before it was operational.

New York City awarded a lease for 20 years to restaurateur Dean Poll, who already runs the Boathouse Restaurant in Central Park.

“The City appropriately defended its interests, including its right to reoccupy its own property in Central Park and the Tavern on the Green trademark,” said Gabriela Cacuci, senior bankruptcy attorney for the New York City Law Department.