Bank of Evil (Formerly Lehman Brothers)

The Despicable Conflict

Warning, what you are about to read is not a politically correct story. This is a true story about how hard working, small business owners can be completely ruined by the mistakes of a greedy, money spending, imprudent big business owner (and his legal team) who borrowed hundreds of millions, filed bankruptcy, and is now walking away with 3.5 million dollars in his pocket and leaving devastated families reeling in his wake. This self-same business man will look you straight in the eye and offer sympathy even as he is slitting your throat.

The Cast of Characters

This is a drama with 3 main characters: the Debtor (our lessor or landlord), the Lender (Lehman Brothers Holdings Inc.) and the Contract Holders (myself included.) My family holds a 20 year lease for a restaurant space in a lodge owned by the Debtor. Almost 12 years ago, we gave up our jobs, sold our homes and uprooted our families, to own and operate a restaurant in a new resort lodge. At the time, the lessor desperately needed us, as he had no knowledge regarding the food and beverage industry. We signed on for a 20 year haul and have been working our backsides off ever since.

Bank of Evil (Formerly Lehman Brothers)

From the movie "Despicable Me"
From the movie "Despicable Me"

Just a Little Ditti about Being a Restaurant Owner

If anyone out there has any experience in the restaurant industry, you know what an exhausting grind it can be. To run a restaurant is to subject oneself to constant criticism coming from every angle. Your kitchen staff will blame you for their own inadequacies, your customers can be impossible to please (especially if they are the irritable-when-hungry type,) your servers care only about how much they've made in tips today (they all seem to have very short-term memories,) and everyone seems to perceive you as a source of unlimited wealth (this goes for employees, purveyors, charities, local cheapskates and anyone else with an overdeveloped sense of entitlement.) They look around at the busy restaurant in a beautiful location and think: "whoever owns this must be rich." The very next thought seems to be "they should give me their money." This is especially true of our government. Somehow, it is just assumed that if you are a business owner, you can afford to support your employees, your community, your health care system and why not the whole damn country while you're at it. (I did warn you this would not be P.C., didn't I?)

It is never ending; your own employees will rob you blind if you do not keep constant vigilance. They will also hang you out to dry, like our chef of three years who decided to quit on the day of a wedding for 200 plus people. He didn't even so much as give us a phone call.

If you are considering opening a restaurant of your own, know that 14 hour days are average, plan on having chronically sore feet, and expect to not have a whole lot to show for it at the end of the day. By the time you pay the rent or mortgage (with taxes,) payroll (with taxes,) insurance, product and delivery (keep in mind that product is perishable and that freshness is paramount, plus taxes,) utilities (this is huge in the restaurant industry,) supplies (don't forget that everything from glassware to furnishings gets broken and/or stolen on a frequent basis,) and income taxes, there is just not much left for you, the weary owner. This is not an all-inclusive list of expenses, by-the-way, but it may help to explain why 9 out of 10 new restaurants fail in the U.S.

The Drama Unfolds...

As I mentioned earlier, we had a 20 year lease for our business in a certain, unnamed lodge. The owner of this lodge, as well as the surrounding ski and golf resort, borrowed more than $200 million dollars from Lehman Brothers Holding Inc. I should mention here that Mr. Owner had made millions in real estate sales, flew around in a private jet, vacationed in the Caribbean with his entire extended family (and still does) and built a multi-million dollar home during the eight or so years leading up to this point. In September 2008, Lehman Brothers filed for Chapter 11 bankruptcy protection; interestingly, the members of Lehman Brothers' executive investment management committee still received their full multi-million dollar bonuses for that year. Wow, what is it like to be paid millions for screwing up so catastrophically?

About one year later, the Debtor (our lessor) also filed for Chapter 11 bankruptcy protection. The next step for them was to reorganize the way the resort had been run. Never-mind that big, big money (I'm talking millions here) had been squandered over the last decade by the owner's ineptitude, or that the entire resort was top heavy with executive level employees, or that contemptible cases of theft within their own ranks had been uncovered, no, never-mind all that, they decided to focus on the one entity within this resort that was keeping its head above water. Through hard work (it helps keep labor costs down if you do it all yourself) we, the restaurant, had managed to stay out of debt and even eke out a living for ourselves and our family. We had developed a rapport with countless regular customers (by being on-site all the time ) and we had established a reputation for excellent cuisine in a friendly, comfortable environment. And now they sought to take it for themselves despite the fact that our contract with them was only 9 years into the 20 year agreement.

The Climax, but is it the End?

That was two years ago and we have been fighting tooth and nail to hang on to our business ever since. We are depleted physically and financially but still we grapple. About two weeks ago, the Debtor and the Lender filed a Disclosure Statement of a joint Settlement Agreement which must still be approved by the bankruptcy court. This document is over 1000 pages long and seems to be intentionally misleading to the reader, in-other-words, it is not a very "disclosing" disclosure statement. However, by weeding through it, one discovers these important facts:

  1. All of the Debtors assets are being transferred to the Lender and the Lender plans to own and continue operations of the resort. I.e., Lehman is taking over.
  2. The value of the resort is estimated at $43 million and the debtor will not be held accountable for the remaining debt owed. (Remember, he borrowed over $200 million.)
  3. The Debtor will personally receive $3.5 million as a "settlement payment."
  4. Neither the Debtor nor the Lender (and new owner) will be required to pay back any other creditors (such as the club members who have invested heavily in the entire resort) or honor any pre-existing contracts. Apparently, this is legal if the bankruptcy court approves it.

What does this all mean to me? Basically, it means that if the court approves this agreement, Lehman can just chuck us out on our backsides without even so much as a "thanks-but-no thanks." All of our blood, sweat, tears and dollars, for what? The damnedest part is that we were not the ones who created this mess, got in debt, made stupid decisions or any of it. But we will be the ones to struggle to feed our kids while the engineer of this hornets' nest makes millions for his part in what has turned out to be a major debacle.

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Comments 36 comments

K9keystrokes profile image

K9keystrokes 5 years ago from Northern, California

Wow! This is intense stuff my friend. Nice read. Up and awesome Mrs. M-- I have great respect for your dibacle!

K9


marellen 5 years ago

This sucks.....And we wonder why our country is in the shape its in....I'm extremely sorry that you and your family are going through this. My prayers are headed your way in hopes that you will come out ahead. Although, its unlikely.


cardelean profile image

cardelean 5 years ago from Michigan

And you still have time to write???? Wow, what an unfortunate circumstance that you and your family are in. I hope that you will find the light at the end of this dark tunnel and my thoughts and prayers are with you.


Naomi R. Cox profile image

Naomi R. Cox 5 years ago from Elberton, Georgia

In our lives some of us has to cope with people like Mr.Owner and Lehman Brothers, they do low down dirty things that makes our life miserable. Sorry to hear that you and your family are having to cope with such people now. Keep looking up my friend, hopefully things will turn out for the best for you. I send my thoughts and prayers your way, that you will have the strength for the days ahead.


Denise Handlon profile image

Denise Handlon 5 years ago from North Carolina

Ditto, Cara's statement: you still have time to write? Wow, I'm always amazed and humbled at the bits of personal life that hubbers share in the community. I am so very sorry for your difficulty. To say, "not fair!" is an understatement.

I have been very aware of the hard working labor force of the restaurant owners. I have personally known a few rest.owners. What recourse do you have? A lawsuit for breaking the terms of your lease?

My heart goes out to you and your family. I am just blown away-You will be in my thoughts and prayers!


AliciaC profile image

AliciaC 5 years ago from British Columbia, Canada

I am very sorry for the situation that you are in, Mrs. Menagerie. You will be in my thoughts too. I so hope that there will be a happy resolution to the problem that you are facing, or at least the best resolution possible.


jamesjacques profile image

jamesjacques 5 years ago from Seattle

Jesus that's awful, good luck sorting things out.


truthfornow profile image

truthfornow 5 years ago from New Orleans, LA

This story is what is wrong in this world. People who work hard everyday, getting punished by greedy people who get away with being evil. Try to keep the faith that you will make it through this situation.


Mrs. Menagerie profile image

Mrs. Menagerie 5 years ago from The Zoo Author

Hi K9, I sure appreciate votes and kind words!

Marellen, thanks, it does suck.

Denise and Cara, I "steal" bits of time to write here and there...between lunch and dinner on a slow day or late at night when I'm waiting for those last few customers to leave...ya know. It keeps me sane.

Naomi, thank you for your encouragement!


Just Ask Susan profile image

Just Ask Susan 5 years ago from Ontario, Canada

Wow I am so sorry to read this. You must be a very strong person to hold it all together and still be able to write about it. I can only imagine what you must be feeling. I do wish you all the best no matter what happens.


James A Watkins profile image

James A Watkins 5 years ago from Chicago

It would seem that the terms of your lease would protect you under basic contract law. Of course, I haven't read your lease; perhaps it had loopholes through which you could be booted out upon insolvency of your landlord.

This is a sad story. I wish you the best. It is a shame to see all of that hard work go down the drain in such a rude and wasteful fashion. You presented your story with excellence.


Mrs. Menagerie profile image

Mrs. Menagerie 5 years ago from The Zoo Author

Alicia_ thanks for keeping me in your thoughts...I love the Hub community. People who don't even know you but still care...thank you sooo much!

James--thanks for the luck, I'll take it!

Truthfornow--I agree, I don't think bankruptcy protection was intended to allow the bankruptee to walk away from his debt with millions, leaving the little guys high and dry.


Mrs. Menagerie profile image

Mrs. Menagerie 5 years ago from The Zoo Author

Hi Susan, thank you for your kind support...really, thanks!

Hi James, apparently bankruptcy court is omnipotent...no lease or contract is binding...


dgayhart 5 years ago

Mrs. Menagerie, You and your family are always in my prayers. I really hope it all works out, I know how hard you have worked. Karma....


Simone Smith profile image

Simone Smith 5 years ago from San Francisco

Goodness gracious, Mrs. Menagerie. The fact that you DO keep your cool in such circumstances, and with such great style and grace, is truly impressive!

And my goodness- that those masterpieces of Hubs you write are created in stolen moments during your busy day... that's plain incredible! I can only imagine how amazing your restaurant is if you're involved.

I'm terribly sorry about this situation you've ended up in. I always felt odd reading about bankruptcy in business school since it never seemed quite right. Now I see exactly what was tearing at my comfort with it. Exactly the WRONG people get hit!

I wish you all the best with this!! Urgh. I'm furious on your behalf.


Danette Watt profile image

Danette Watt 5 years ago from Illinois

Halfway through reading this hub, I began to get a sinking feeling in my stomach because I could see where it was headed. Many people are struggling in this country because of the idiocy of people at the top of the heap, and most certainly that includes you and your family.I can only imagine the anger you must be feeling. I hope that this ends in your favor and my thoughts will be with you.


Mrs. Menagerie profile image

Mrs. Menagerie 5 years ago from The Zoo Author

Hi Donna and Happy Birthday!!!

Thank you Simone, I'm furious too but trying to keep a sense of humor to some degree. Thank you for your compliments to my hubs, yes, many have been published at 1am, heehee.

Hello Danette, I really appreciate your understanding and good wishes. Maybe the bankruptcy court judge will favor the local working families...he is a Montanan, so that seems encouraging!


Patty Inglish, MS profile image

Patty Inglish, MS 5 years ago from North America

After about 10 yrs managing in three restaurant chains, I don't think I could run a restaurant again. Expenses are an even higher proportion of the P & L now and we worked 14 hour days, but I know that your family works harder as leasors of the space than a chain manager works. I remember one early year in the business as assistants - we were not permitted to eat, drink anything, or use the restroom during 12-hour shifts. That one closed down.

Best wishes for you; it's an impossibly hard life in food services.


DoItForHer 5 years ago

Another example of how the Corporate States of America runs over its citizens. Sickening. And all I can do is watch it unfold. I feel so helpless sometimes.


Mrs. Menagerie profile image

Mrs. Menagerie 5 years ago from The Zoo Author

Hi Patty, it sounds like you know exactly what I'm taking about, thanks. BTW, I can't believe you were not allowed those basic human necessities for 12 hours! That's nuts!

Hey Doitforher! Where have you been?


Mrs. Menagerie profile image

Mrs. Menagerie 5 years ago from The Zoo Author

I would like to add a little note to this hub...many employees are amazingly hardworking, trustworthy and great at what they do. We are very lucky to have people like them working with us. Also, many customers, most customers actually, are sincerely wonderful and dear people who make it all worth it. I feel that I unfairly neglected to mention the good people when I wrote this hub about the not-so-good ones.


Nell Rose profile image

Nell Rose 5 years ago from England

Hi, it seems these days that the harder you try, there are the people out their that try harder to pull you down, I am so sorry to hear this, cheers nell


Mrs. Menagerie profile image

Mrs. Menagerie 5 years ago from The Zoo Author

Hi Nell, I was just reading your most recent hub, I must say those photos are very motivating! Thanks for reading and your kind words.


ACEmom 5 years ago

Can soooo sympathize with your plight!!! Discovery Land Company is the same way with their employees/contractors Money Talks and BS walk, eh?! Miss You Mrs. M from down here in Austin! Send cool thoughts our way, Hope all pans out in your favor somehow!


Mrs. Menagerie profile image

Mrs. Menagerie 5 years ago from The Zoo Author

Hey acemom (perfect name btw) great to hear from you! How's life beyond Discoveryland?


Pintoman profile image

Pintoman 5 years ago

You forgot to mention the lawyers that make it all possible. That 1000 page disclosure was 1000 pages just to make it expensive for your lawyer to read it. This is one reason I self-represent, they can't force me under with lawyer fees because I don't have any. It's also funny to watch them think they've got me because I'm not a lawyer and can't possible know what I'm doing. Works to my advantage.


Mrs. Menagerie profile image

Mrs. Menagerie 5 years ago from The Zoo Author

Wow, that's awesome Pintoman. We are quite aware that they are trying to bleed us dry with lawyer fees...and it's working. I don't know how we'd do it without lawyers though...you must be very well versed in the law(s)...I find it all very imposing!


kashmir56 profile image

kashmir56 5 years ago from Massachusetts

I am so sorry to hear about this situation you are going through, hope it all works out for you in the end .


Mrs. Menagerie profile image

Mrs. Menagerie 5 years ago from The Zoo Author

Thanks Tom, I appreciate that! We're still waiting...


Mrs. Menagerie profile image

Mrs. Menagerie 5 years ago from The Zoo Author

UPDATE...the bankruptcy judge chose to approve the bankruptcy agreement including the part about throwing out our contract...so that's a wrap. I guess I need to find a new job. Anyone know of anything?


cardelean profile image

cardelean 5 years ago from Michigan

I'm sick to my stomach for you reading this update. That absolutely sucks. I'm so sorry for you and if I was independently wealthy I'd send you some money. :(


Mrs. Menagerie profile image

Mrs. Menagerie 5 years ago from The Zoo Author

Cardelean...you are tooooo kind. I'm already on the hunt for a new and better job so, maybe, this will be a positive change in the end. Every ending a a new beginning...that's my attitude now. Onward and upward!!!:)

I like your new photo, btw!


irvinetraveller profile image

irvinetraveller 5 years ago from California

I am trully sorry for how the case ended, but won't the bankruptsy court monetize the value or goodwill that you, even as a lessor, provided to the resort lodge? The lender is getting the assets. The owner is getting a settlement payment. I'm not a lawyer but I feel that your restaurant contributed to the assets that have accummulated.


Mrs. Menagerie profile image

Mrs. Menagerie 5 years ago from The Zoo Author

Hi Irvine,

Thank you for your kind words. I agree, that it should have been different. We were very disappointed that the bankruptcy judge made the decision that he made.


Huntgoddess profile image

Huntgoddess 4 years ago from Midwest U.S.A.

You should file a notice of appeal.

This is just so horrible. I agree with the Pintoman about the thousand pages. They just do that to make your expenses go up.

It's sick, and something like this should not be allowed to happen here in the United States of America.


Mrs. Menagerie profile image

Mrs. Menagerie 4 years ago from The Zoo Author

Thanks Huntgoddess!

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