Crystal Ristorante closure has creditors in pursuit
AMSTERDAM Crystal Ristorante had some surprise guests attend its second-to-last day of business Sunday.
They were deputies of the Montgomery County Sheriff’s Department, none of whom were invited to witness the end of the 67-year-old, family-owned business. Owner Tony Centi closed the restaurant Monday and the property is awaiting sale through foreclosure auction.
During their visit, deputies seized cash from Centi’s registers, part of a civil judgment against him by the Montgomery County Industrial Development Agency.
The IDA won the judgment in Montgomery County Court after Centi defaulted on a $110,000 loan IDA gave him for his business in 2009. He signed the judgment in April when he renegotiated loan repayments with the IDA but stopped making payments shortly thereafter.
IDA Executive Director Ken Rose said the judgment allowed his agency to “take whatever action necessary to protect our interest.” He said deputies “took whatever money was in the cash registers.” He could not provide the specific amount that was seized.
Centi was not available for comment.
The IDA had tried to foreclose on the kitchen equipment in August, but had to abandon the process when it learned Centi had pledged the same equipment as collateral for an earlier loan to a bank and that the bank has first position on the equipment. It is considered improper to use the same items twice as collateral.
Centi had used it as collateral when he borrowed $1.2 million from Ciena Capital, also known as BLX Capital, LLC, in 2004 to add a banquet hall onto the bar and restaurant. He then pledged the same equipment in 2009 to the IDA when he borrowed $150,000 from its revolving loan fund for his business, according to the IDA.
The bank initiated foreclosure proceedings against Centi in June 2011 when he defaulted on his loan to them. The bank is likely to recover most of its money when it sells the property. The IDA, meanwhile, is unlikely to recover the $110,000 loan balance when the property is sold, because of its secondary position on the collateral.
Rose said the IDA is still keeping its legal options open regarding Centi and the defaulted loan. The IDA also obtained a personal guarantee from Centi on the loan. The guarantee would have allowed the IDA to use Centi’s personal assets, such as his home, to recoup the loan. But Centi and his wife Carolyn in April negated the guarantee when they filed for Chapter 7 personal bankruptcy protection in federal court.
Centi has said publicly he plans to open another restaurant somewhere, but Rose isn’t sure where he will obtain financing, given his financial track record.