By Amy McCarthy
By Scott Reitz
By Scott Reitz
By Lauren Drewes Daniels
By Alice Laussade
By City of Ate
So Galvan handed Antonovich a fully equipped restaurant with a premium lease that generated roughly $1.8 million in annual sales in exchange for a nominal stock purchase price and Antonovich's personal guarantee to assume some $650,000 in debt. The chef was to use cash flow to meet liabilities that included $350,000 from investor George Mahr, some $60,000 in bills and equipment leases, and remaining payments on a Small Business Administration note secured through Legacy Bank. An investor even stepped forward to cover SBA note payments through the summer to give Antonovich some breathing room.
Yet rather than make minor menu and fixture adjustments before hitting the ground running, Antonovich shut the restaurant down for more than a week, cutting off cash flow. He commenced a spending binge, committing for new lighting, kitchen equipment and furnishings, and finish work that included textured walls and an etched glass partition near the bar. He even bought an automated teller machine and spent $20,000 on a grand piano. "We eventually opened with two baby grand pianos," says a onetime employee.
After opening, former employees say, the restaurant did brisk business. Antonovich quickly built up a local following through word of mouth.
But many wonder aloud where the cash went. Antonovich claims 90 percent of it went to payroll. Yet much of the staff continued to work for weeks without pay on Antonovich's incessant promises that he was in the final throes of a deal with another investor. "One day it was this investor, the next day it was another investor," Brubaker says. "It just kept going on and on and on. He buffaloed all those people."
Sources say that Antonovich did have tentative commitments from several prominent backers, but that they pulled out after Antonovich failed to provide a viable business plan. "He could not deliver documents," says a source familiar with the deal. "He could not tell you what his payables were, and he could not tell you what his payroll was. Investors don't put money into those kinds of deals. You'd have to be insane to do that."
Antonovich doesn't deny he failed to pay some of his employees, contractors, and vendors. But he blames it on investors who didn't come through on their cash commitments and the debt wrapped up in the restaurant ownership transfer, debt that Galvan is now left holding.
"I don't think Matt realized that he has affected a huge number of people's lives negatively," Rutledge says. "He's so naive in the way he thinks and in the way he goes about doing things that I don't think he understands what he has done."
Antonovich seems perplexed and angered by the ire directed at him. "If everybody wants justification, tell them all to go buy me a gun and I'll blow my head off," he blurts. "I don't want anything from this business to haunt me in the future over a small situation with a half a dozen people that have a vendetta. What people need to do is be professional. Like I have been."