In the fall 1998 issue of The Lone Wolf Letter, a promotional newsletter for tobacco retailers, television and film star Chuck Norris and comic actor James Belushi gush over the success of their 2-year-old cigar company. The actors call Lone Wolf one of the most exciting new premium cigar brands to hit the market. They confess that a recent sprinkling of favorable cigar magazine reviews and interest the brand has generated among smokers have exceeded their wildest expectations. They publicize the Beverly Hills launch of their newest cigar lounge in Dennis Overstreet's The Wine Merchant, known as the wine shop to the stars where Hollywood types plunk down thousands of dollars for prestige labels and vintages in a single spree. And they trumpet the success of the Lone Wolf Lounge in Dallas, announcing the addition of Overstreet as investor and operator along with the expansion of the location's fine wine selection.
The letter concludes with a solicitation to potential investors stating that Lone Wolf International is lining up licenses for lounge locations nationwide. But just before the close of the year, their cigar empire began unraveling like a stale stogie wrapper. Lone Wolf Lounge on Cedar Springs closed its doors for good December 22, just days after offering special private wine- and cigar-lounge memberships priced at $50 plus a monthly fee of $50. This one-time rate was slashed from normal membership terms that included a one-time $850 fee plus the monthly $50 dues.
The special membership promotion expired December 21. Then on December 23, Grand Prairie-based Lone Wolf International filed for Chapter 11 bankruptcy protection, listing liabilities of $839,667.32 and assets totaling the same amount. As of this writing, a reorganization plan had not been filed.
Yet it's the circumstances surrounding Overstreet's entrance into the Dallas lounge last fall, his departure several weeks later, and Lone Wolf's eventual closure that could pose difficulties for Norris, star of Walker, Texas Ranger, and his Lone Wolf investors. Former employees say Overstreet may have shipped large quantities of expensive and rare wine from his California wine shop into Lone Wolf Lounge for resale, although Texas law prohibits such shipments. One former Lone Wolf server, who spoke on the condition that he not be identified, said he checked in a large wine shipment from California delivered via an 18-wheeler routed through Houston.
"[What] was kind of off the wall to me was the amounts of wine and the prices they were getting in when their business wasn't up to par yet," recalls former Lone Wolf server and bartender Sara Rabjohns, who now works at Red, Hot & Blue in Plano. "They would get enormous shipments in at one time--and price-wise enormous amounts. We'd all kind of laugh about it like, 'Who the hell you going to sell that to?'" Rabjohns says a few of the bottles were selling for as much as $6,000 each.
"It's bootlegging to bring liquor in from another state and start selling it," says Glen Gary, legal counsel for the Texas Restaurant Association. Gary says that Texas, with rules governing the distribution and sale of alcoholic beverages that are among the most stringent in the country, mandates that all alcoholic beverages move through a three-step distribution channel: beverage producer, local wholesaler, and retailer or restaurant.
"All product that comes into the state of Texas must go through that three-tier system," stipulates Brian Guenthner of the Texas Alcoholic Beverage Commission. "It cannot go from the nonresident seller directly to the retailer." TABC officials say administrative penalties for such violations range from license suspensions to revocation, and criminal penalties include fines of up to $1,000 and up to a year in jail, depending on the quantity and value of the product involved.
Guenthner says it's possible that Overstreet might have obtained a non-resident seller's permit to sell alcohol in the state of Texas, but the TABC has no record of issuing Overstreet or anyone affiliated with The Wine Merchant such a permit. Plus, Texas regulations strictly prohibit any person or company from possessing a significant interest in both a restaurant and a wholesaler simultaneously. As an investing operator of Lone Wolf, Overstreet would be disqualified from such an arrangement under Texas law.
Bob Orenstein, president of Dallas-based International Wine Accessories Inc., whose retail mail-order catalog carried Lone Wolf cigars for a short time, says such regulatory skirting among restaurants and retailers is not unusual in Texas. "The concept of taking wine and changing labels and bootlegging it and all that--it's done every day," he admits. "But most of the time it doesn't happen on a big scale."
Yet two servers claim that Lina Dallas, the person Overstreet tapped as Lone Wolf's manager, instructed them to box up and catalog a large segment of Lone Wolf's wine inventory several days before the lounge was shut down.
As many as 50 12-bottle cases of wine were loaded into an unmarked truck, according to former Lone Wolf servers. Dallas explained that the wine would be moved from the premises to another location to protect the inventory during the Walker, Texas Ranger Christmas party to be held on the premises. "She said she heard they were really rowdy and they might steal or break the wine bottles," said one server. "And I was like, 'Why don't we just store it [downstairs], and when the party's over we can just bring it back up?'"
The servers said Dallas assured them the wine would be returned to Lone Wolf after the party. But they suspected Overstreet was reclaiming wine inventory before pulling the plug on the operation. So they asked the driver where he was taking the wine. He replied that his destination was California. "It didn't make any sense," snaps the server. "They must have thought we were real idiots or something."
Guenthner of the TABC says this move also violates Texas law. There are only two circumstances under which alcoholic beverages can legally be removed from a restaurant in Texas: If a patron takes out a bottle of unfinished wine ordered with a meal; or if an operator removes inventory after shutting down the restaurant, canceling the liquor license, and filing a final inventory with the state comptroller.
The TABC says Lone Wolf's liquor license is still active, and there is no record of a final inventory filed with the state comptroller. Dallas, who returned to California two days before Lone Wolf closed, refused to respond to the servers' charges. "I didn't know that Lone Wolf had closed," she says. "I thought they were still operating." Dallas directed all inquiries concerning Lone Wolf to Los Angeles attorney Perry Wander, who is listed as The Wine Merchant's registered agent. Neither Wander nor Overstreet returned repeated phone calls.
But Winston West, an employee of Norris' television production company and an investor in Lone Wolf, categorically denied the servers' allegations. "Oh my God. No. Not true," he says firmly. West quickly added that he was not involved in the day-to-day operation of Lone Wolf. Yet court records show that West is chairman of the board of Lone Wolf International, while state records designate him manager of Norber Associates, the company Norris and his investors formed to operate Lone Wolf and the firm that holds Lone Wolf's liquor license.
Contradicting West, attorney Gerrit Pronske confirmed that Overstreet did indeed ship pricey wines from California to Lone Wolf and back again. "When they closed down, yeah they did that," he concedes. "It was all Dennis' wine. He had brought that in. It was primarily...the more expensive wines that he brought in."
Court records show that Pronske is Lone Wolf International's bankruptcy attorney, while state records list him as registered agent for the Chris Overstreet Corp., the firm through which Dennis Overstreet managed Lone Wolf. Pronske also is listed as the registered agent of Norber Real Estate Corp., the company that owns the property housing the lounge.
Pronske adds that the decision to close Lone Wolf was reached mutually between Overstreet and the Dallas partners. Several servers at Lone Wolf said business fell off precipitously after former Mansion maitre d' Wayne Broadwell and chef Matthew Antonovich backed out of their partnership deal with Overstreet. "They just got tired," says Pronske of Overstreet and the Dallas partners. "The place was losing money, and they made a decision to close it; they made a joint decision to shut it down." He says Lone Wolf most likely will not reopen, and the Dallas investors are reviewing options to either bring in other operators or sell the real estate.
It is perhaps ironic that Norris, a former karate champion and reserve officer in the Terrell, Texas, police department who plays a law-enforcement official in his TV show, may have had a potential bootlegging operation transpiring right under his nose. But the demise of Lone Wolf and its concomitant missteps don't surprise IWA's Orenstein.
"If you look around the country right now, cigar bars are all having problems," he says. "[Lone Wolf] tried to take the cigar bar and bring it to the next level with food and music. But it's still a cigar bar. You don't want to hang your hat on such a thin nail. In my opinion, everybody was caught up in the deal of, 'Ooh, I'm going to be around movie stars.' And that's when people lose track of what the hell they're doing.
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