By Jeremy Hallock
By James Khubiar
By Observer Staff
By Kelly Dearmore
By Jim Schutze
By Rachel Watts
By Lauren Drewes Daniels
"I've done most of the reorganization already, cutting overhead and eliminating staff and expenses," Meyers says. "The real problem is I've had multiple transactions which would've sold assets, provided new investments or sold equity, and each of those has been thwarted due to our inability to settle outstanding litigation." Or, in plain English, people who have offered to purchase or invest in any of the EC's properties have been scared off by the possibility of a civil lawsuit judgment for David Cunniff, the victim of an assault by Jesse Chaddock at the Gypsy Tea Room on July 25, 2004. Although the criminal trial resulted in a 19-year sentence for Chaddock, the subsequent civil suit, which has not yet gone to trial, alleges that negligence on the part of the EC was a contributing factor to the attack.
"We can't raise any money," Meyers says. "We've been handcuffed. This'll give us an opportunity to work out an orderly going-forward plan."
Meyers says that because of Chapter 11, if Cunniff were to win a judgment in court, he would become another creditor in the bankruptcy reorganization. In addition, he concedes that "if someone comes in, wants to buy Gypsy Tea Room and pay X, and all the creditors think that's a terrific idea, then that's probably what the judge is going to do." The EC also now shares Chapter 11 status with Curtain Club, which is still restructuring thanks to a default judgment of $2 million awarded against the company in September 2004 that is still being appealed.
Worst of all, the EC's Chapter 11 filing proves that all the rumors of financial peril I've heard about the EC have at least some truth to them, and there's no telling what will happen to the Gypsy Tea Room, Deep Ellum's indisputable king of quality concerts, in the months to come. But at least Meyers is optimistic.
"I told this to my staff--we've hit the bottom of the trough. The opportunity will be there for Deep Ellum to rebound, and we need to be in a position to take advantage of that."
And if you people complain about a lack of shows in Dallas ever again, I will point at this week with one hand and slap you in the mouth with the other. Go see some good music.