Caolo believes Suckow and Hager frustrated lease negotiations to nullify Suckow's agreement with Caolo, canceling the infusion of hundreds of thousands of additional dollars needed to keep FoodStar solvent and cover Caolo's guarantees. "There was no conspiracy," Hager says with a laugh. "Everything, absolutely everything, was contingent on retaining the PoPoLos lease. It wasn't inserted. It was always on the table." Hager charges that Caolo thwarted the PoPoLos lease in an attempt to put a gun to Suckow's head and leverage a better deal for himself, a charge Caolo says is ludicrous. (Original owner Maury Jaffer eventually got the restaurant back from Suckow, and intends to reopen it in February).
On September 30, Suckow gave written notice that he intended to foreclose on FoodStar's remaining assets October 8.
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David Dennard
Mediterraneo at the Quadrangle and Toscana (pictured) earned raves for their food, but that was not enough to save the restaurant's parent company.
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Caolo immediately counterpunched. On October 7, he sued Lee Suckow and Clever Ideas, alleging fraud and breach of contract. That same day, he frustrated their attempts to foreclose on the restaurants by gathering various creditors (including himself) and forcing FoodStar into Chapter 7 bankruptcy.
"Hager is Suckow's puppet," says Caolo. "The bottom line is, my financial angel turned into a nightmare."
Hager scoffs at Caolo's charges. He says his objective from the very beginning was to serve the best interests of FoodStar and its employees. "I wasn't Michael Caolo's puppet. I'm not Lee Suckow's puppet," counters Hager. "My goal was to save the businesses. Nine months from now, Mediterraneo and Toscana will still be in business. They'll still be serving the fine food and the service that they're known for."
At this point, it's a difficult scenario to imagine. Bankruptcy Judge Steven Felsenthal will rule on January 7 whether the restaurants will be sold and to whom, or whether they will simply go dark forever. Michael Costa is scrambling to put a deal together to either own or manage the restaurants, and rumors say Richmont Corp. is also looking over Mediterraneo, which ironically could put David Holben back in the kitchen. Richmont's Tompkins would confirm only that they received a letter from the bankruptcy trustee soliciting an offer.
But with his $1 million note to use as currency in any bidding war, Suckow appears to have the upper hand. Yet Caolo slyly outlines a plot whereby he could get the restaurants back if Suckow should get them. He boasts he could pry the restaurants from Suckow's grip in a damage award following the conclusion of his fraud suit against Suckow.
"I got everything I wanted in bankruptcy court," Caolo says. "I got a trustee appointed, and I got them into Chapter 7. And Suckow's having to invest more money into the thing. I've got him in the crosshairs. He's going to take a hosing."
This ship of fools may be unsinkable.
