Longtime restaurateur and celebrity chef Matt Prentice, the CEO of Bingham Farms-based Trowbridge Restaurant Group, has filed for Chapter 7 bankruptcy . The bankruptcy filing listed Prentice's assets at $256,555 and his debts at $4.9 million. Of that debt, $1.5 million is owed in unpaid federal and state taxes.
According to the filing, Prentice's assets include his home, worth $250,000, and $6,550 in personal belongings.
Unsecured creditors appear to be related to debt from previous corporate entities - including his Matt Prentice Restaurant Group which was sold in 2009. Major creditors include Chase Bank, $1.3 million; U.S. Bank Trust, $1.1 million; the real estate company Burton Share Inc., $500,000; Lipson Neilson Cole Seltzer Garin P.C., $100,000; and Yatooma & Associates, $11,500.
Reportedly, Prentice has been struggling to keep his company alive, even cutting about $1.8 million from the restaurant group's operating budget; but none of it was enough to combat already dwindling sales. Many restaurants have been battered during this recession, sending many to restructure or liquidate in bankruptcy.
If Prentice is like most entrepreneurs he probably guaranteed many of his business debts and held off on paying taxes hoping that he could play "catch up" with his debts. Unfortunately, because of the current recession, the opportunity to catch up never came and bankruptcy became the best option for his rising debts problem.
While it's not likely that Prentice can discharge his most recent tax debt he may be able to negotiate a reduction in the overall tax bill and/or work out a payment arrangement with tax authorities. After his other unsecured debts are discharged in bankruptcy, he will have more income to work with so that he can put his finances back on track.
(source: http://www.crainsdetroit.com/article/20110203/FREE/110209950 )