Gay bar BJ Roosters – facing nearly $600,000 in lawsuit settlements and attorney fees – filed for bankruptcy on Wednesday, hoping to restructure its debts and remain open in the wake of three costly federal lawsuits.
The bankruptcy filing by Jobo's, Inc. – the corporate parent of the Cheshire Bridge Road bar – was accompanied by personal bankruptcy filings from its two owners, CEO Bobby Hamill and John Molinari. All three filings list the same debts – some $594,679.31 owed to its attorneys, former bartenders and dancers, and the lawyers who sued the bar on their behalf.
The bankruptcy filing came a week after the bar settled a lawsuit from a former bartender over unpaid wages. The total payout in that case to ex-employee Gary Drews and his attorneys was $91,917.03. BJ Roosters settled the case less than three weeks after losing a similar lawsuit filed by former bartender Richard Martin. A federal judge ordered the bar to pay $108,740.32 in unpaid wages and overtime, along with attorney fees, after a trial.
And facing a Dec. 7 trial in a third lawsuit – this one filed by Charles Allen and other former dancers over unpaid wages and kickbacks paid to the bar – the bar also moved to settle. On Nov. 30, the trial was cancelled as U.S. District Court Judge Richard Story gave both sides 30 days to file a settlement agreement.
Details of that settlement had not been made public before the bar pursued bankruptcy this week. But those court documents show that the bar agreed to pay $294,021.96 – some $208,881.58 to Allen and 15 other former dancers and $85,140.38 to their attorneys.
Facing the nearly $600,000 in payouts from the lawsuits and attorney fees, Hamill says the business turned to bankruptcy court to structure a plan to pay the debts and remain open.
“BJ Roosters will continue to be open,” Hamill says. “We are not closing. We are having to restructure so we can pay for these lawsuits. This is a business decision so that we can continue to stay open and run our business.”
“Everybody will eventually get paid. This gives us a longer time to pay them,” he adds.
The bar will face its creditors on Jan. 28 during a meeting in federal bankruptcy court.
In its bankruptcy filing, BJ's estimates its assets between $50,000 and $100,000 but lists liabilities at $500,000 to $1 million. The debts listed include $494,679.31 in lawsuit settlements and fees to attorneys for the dancers and bartenders. Also included is $100,000 owed to Wimberly, Lawson, Steckel, Schneider & Stine, the Atlanta law firm that represented the bar in its three labor and wage lawsuits.
Kevin Fitzpatrick, an attorney with DeLong Caldwell Bridgers & Fitzpatrick Law Firm, says the bankruptcy filing temporarily stops their collection efforts. The firm represents the two former bartenders who sued BJ's.
“It's not something that is going to happen in the next week or so,” Fitzpatrick says. “Everybody gets to take a deep breath and they don't have to worry about us showing up with federal marshals and demanding they open up the cash register.”
Fitzpatrick says it's not uncommon for a business to file bankruptcy after losing a wage and labor lawsuit. It adds another layer to the collection efforts, but the law firm will play a role in the bankruptcy process and structuring the bar's payment plans, he adds.
“Like Donald Trump, they are using the bankruptcy court. That's always a risk in what we do,” Fitzpatrick says.
“I would have been surprised if they would have not done it. This is just another step and we're one day closer to the end of resolving all the employee issues with BJ Roosters. It is just going to take longer than our clients would have liked,” he adds.