Investors, employees and others went unpaid when theatre closes
By Pankaj Ladhar of Manos • Alwine P.L.
When a movie theatre opened last year in Florida, employees and others doing business with the owner assumed that the owner would do his best to keep up with his bills and payroll. But when the business went under they were all left empty-handed and discovered that they were not the first ones to find themselves in this position.
According to local news sources, the owner and his business have been the subject of numerous commercial lawsuits resulting from an apparent failure to pay creditors and employees. An investigation determined that the owner was associated with at least 88 theatres in Florida and other states, but that the majority of these never opened or were open only for a short time. It was also determined that the owner and his business have been subject to lawsuits at least 69 times and have been ordered to pay more than $24 million in civil judgments.
The owner is alleged to have convinced commercial property owners to provide upfront funding for construction or renovation of the theatres. In some cases the owner actually hired contractors to do the work but then failed to pay them when the bills came due.
When investors, contractors and employees have attempted to collect on these unpaid bills and judgments, they assert that the owner hid all of his assets and property, while all the while living in an upscale condominium. Surprisingly there is no record of criminal fraud actions against the owner.
In many situations, business disputes arise because the entrepreneurial plans of one party do not work out as well as they had hoped. In this case however it appears that there was an absence of good faith in the owner’s business dealings.
Source: Treasure Coast Palm “Ex-owner of failed Stuart theater leaves behind unpaid bills, fraud allegations” Matt Clark, Aug. 23, 2011