The Lynyrd Skynyrd BBQ and Beer and American Burger Works restaurants at the Excalibur hotel-casino in Las Vegas will remain closed after a court hearing Friday.
U.S. Bankruptcy Judge Linda Riegle denied an emergency motion by the restaurants' bankrupt owner that they be allowed to re-open. The owner claimed it wasn't properly noticed of the Excalibur plan to evict the restaurants, resulting in their forced closures Wednesday.
Riegle said the Excalibur appeared to be within its rights to lock the owners out of the restaurants after they failed to pay past-due rent and failed to resolve default notices dating to March.
Riegle, however, warned an Excalibur attorney the casino could face hefty damages if evidence is produced showing the lease terminations and evictions were improper.
Todd Bice, attorney for the casino, said the casino is confident it did the right thing.
Bice said that on Wednesday morning as eviction notices were sent to the restaurant owners, Excalibur crews erected a construction wall to separate the Lynyrd Skynyrd restaurant from the casino floor.
The owners of Lynyrd Skynyrd BBQ and Beer and American Burger Works filed for bankruptcy later Wednesday in hopes that their leases would be ratified and protected by the bankruptcy law's automatic prohibition against evictions and lawsuits involving debtors.
Samuel Schwartz, attorney for restaurant managers and investors Craig Gilbert and Michael Frey, complained the Excalibur shut down the restaurants and notified the managers of that action as they were observing the Yom Kippur Jewish holiday.
Riegle expressed concern about the timing of the events, saying it was potentially offensive, "In light of knowing a religious holiday was happening.''
Bice, however, said the timing of the shutdown had nothing to do with the holiday as the restaurant owners had missed repeated deadlines to come current on rent and other payments. Records show they owe more than $1 million for the restaurant buildout costs and are behind on rent.
"Our rights don't get tabled because of holidays," Bice said.
The issue of whether the restaurants were properly evicted may continue to be litigated, though both sides indicated there's little chance the restaurants, which employed nearly 90 people, will ever re-open.
"We hope to reach an amicable resolution. The parties seem to be farther apart than we had hoped," Schwartz said after the hearing.
Both restaurants opened in late 2011, with Lynyrd Skynyrd BBQ and Beer receiving praise for the quality of its food and its Southern rock atmosphere.