A Broad Street watering hole filed for Chapter 11 bankruptcy protection Wednesday after a run-in with the taxman.
The Republic made the bankruptcy filing in order to reopen after tax issues forced it to close last week.
Facing almost $300,000 in federal, state and local back taxes, the bar and restaurant received a visit July 2 from the Virginia Department of Taxation and was locked out of its building at 2503 W. Broad Street.
Filing Chapter 11 gives the Republic some breathing room while it works things out with the IRS, VDT and the City of Richmond. Chapter 11 also allowed it to get its keys back and open the doors to thirsty patrons.
“We are very happy to be back in the building,” said Republic Executive General Manager Jami Bohdan.
Bohdan said the unpaid taxes are related to the restaurant’s previous ownership group.
The back taxes include $110,000 to the state, $100,000 to the IRS and $80,000 to the city, according to its bankruptcy filing.
Current owner Tony Hawkins took controlling ownership of the Republic in June 2011. He also owns the Metro Grill on North Robinson Street, which he purchased in April after it went up for sale in September.
“We’re taking responsibility for it,” Bohdan said of the tax burden. “But we have everything taken care of. We should never have this problem again.”
Once it was shut down by the state, the Republic hired Roy Terry, an attorney with Sands Anderson, to represent it in its Chapter 11 case.
“That’s what we had to do to take care of everything [and] to start with a clean slate,” Bohdan said.
The Republic, which opened for business in late 2009, was originally owned in part by Justin French. French at one time owned the Republic’s building with former partner Matthew Appelget and most of the real estate on the same block.
Richard Lyons, a former partner in Star-Lite and Bandito’s, headed the group that created the Republic.
The Republic’s debts listed in its filing also include $56,000 owed to Lyons. The restaurant said it is disputing that claim, according to the bankruptcy filing.
Prior to buying out the previous owners last year, Hawkins had a minority interest in the Republic, Terry said.
A portion of the tax problems were inherited. “The bottom line is, there were some tax obligations that he was unaware of,” Terry said.
There have also since been some additional unpaid taxes that accrued, Terry said.
“He’s gotten it to a point now where he firmly believes he’ll be able to keep up with the current obligations,” Terry said.
Hawkins could not be reached for comment.
In a posting on the Republic’s website this week, Hawkins addressed the “Republic Family”:
“I would like to take this time to thank you all for the support and prayers in our time of need. I had no idea that this establishment means so much to so many. It would have been easy to close last week and move on with life. After the support I received from the staff, patrons and family, I knew I could not let these doors close for good.”