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Cocktail property seized over rent debts
by Kate Sosin, Windy City Times
2013-01-18

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Boystown bar Cocktail has been shuttered over alleged rent debts, the third and possibly final in a series of closings of the bar in the last two years.

The news broke after a picture of a "Distress for Rent" notice posted on the bar started circulating on Facebook Jan. 18.

Building owner Robert Brumbaugh confirmed that he had posted the notice and said that he has seized all property inside the bar except for the liquor.

"After more than a year of eviction litigation and over $85,000 in unpaid rent, it should come as no surprise to [Cocktail owner] John Zaharakis and his attorney Jacob Meister, that Cocktail's landlord would exercise his legal right for compensation under the Illinois Distress for Rent statute," Brumbaugh said.

The closing comes after Cocktail's petition for bankruptcy protection was rejected by the Northern District Court of Illinois over a failure to pay taxes.

According to Brumbaugh, Cocktail owes more than $85,344 in rent.

Brumbaugh and Cocktail, owned by John "Geno" Zaharakis and Dustin Hoffman, have been ensnarled in a court battle for more than a year now.

Brumbaugh has been trying to evict Cocktail over unpaid rent, he said. Cocktail, on the other hand, is suing Brumbaugh and two former employees for alleged conspiracy to financially ruin the bar and take it over.

Brumbaugh said the bar has been accumulating rental debt since before he purchased the property two summers ago.

"If I thought this was going to keep dragging on, I would have done this a year ago," Brumbaugh said.

The legal maneuver of seizing a business tenant's property is an old common law practice rarely employed by landlords. And it is risky, according to an article published by Illinois Legal Aid, because it rarely covers the costs owed and sometimes can result in the landlord owing the tenant money.

It also means that Cocktail was not evicted. Rather, the seizure of its property will make business nearly impossible.

"Technically speaking, the guy [Zaharakis] could have a candlelight vigil and sell booze," said Brumbaugh.

Brumbaugh said that the property will likely be auctioned off to pay for part of the back rent owed.

The bar, a Boystown fixture since the mid '90s, has experienced a tumultuous few years. After filing suit against Brumbaugh, its management company and two former employees, Cocktail announced the sale of the bar. Shortly after, Zahakis and Hoffman said that deal had fallen through.

Cocktail was involuntarily closed twice before in recent months, after the Department of Revenue revoked the bar's liquor license for a failure to pay sales taxes.

After the bar's first closure, Zaharakis and Hoffman told Windy City Times that Brumbaugh had gone out of his way to report Cocktail. But a Department of Revenue spokesperson said that the shuttering was due to the bar's failure to turn over sales taxes alone.

In August, With a Stick, Inc., the company over Cocktail, filed for Chapter 11 bankruptcy protection.

A court rejected that petition in late December, stating that the bar was operating off of owed sales taxes.

Jacob Meister, attorney for Cocktail, previously told Windy City Times that renovations to the bar had financially strained Zaharakis and Hoffman during a slow economy.

Meister said he believes that Brumbaugh wrongfully seized Cocktail's property using "Wild West" tactics.

"In 22 years, I have never seen anybody as mean and vindictive as Robert Brumbaugh," said Meister. "The amount that is owed is disputed. But to the extent that he is owed anything, it's the product of his own doing."

Meister said that Cocktail's position is that Brumbaugh owes Cocktail, over the alleged conspiracy to destroy the bar.

Meister alleges that Brumbaugh took third party property not owned by Cocktail, including employee wages. He also alleges that Brumbaugh purposely left the bar in a state of disarray.

Brumbaugh said the money he is owed and the money owed to the Department of Revenue are part of a pattern for Cocktail. He said the seizure should come as no surprise.

"Mr. Meister's personal attacks on my character, however amusing to him, do not alter the fact that Cocktail hasn't been paying its rent and has not been paying taxes he has been collecting on the state's behalf," said Brumbaugh.


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