A pair of Hollywood nightclub impresarios may close their Cuban-themed restaurant Paladar after losing a court case filed by former contractors and settling related suits adding up to $365,000.
Alan Nathan and Anton Posniak, who helped put Hollywood back on the map with their celebrity-attracting nightspots, have sold their nightclub Ivar and now the pair says they could be forced to shutter Paladar or place it into bankruptcy.
A Superior Court judge issued a judgment that Nathan and Posniak owe $190,000, including attorneys’ fees and interest, for work performed by contractor Kaufman Carrara Inc.
Nathan and Posniak also settled separate suits brought by Kaufman Carrara stemming from similar allegations of unpaid work totaling $175,000 at its Hollywood nightclubs Nacional and Ivar.
The sums could force the closure of Paladar, which Posniak said is only slightly more than breaking even. He said that Nacional, which is in the same building as Paladar, could be expanded to take the restaurant’s space.
“We might not have a choice,” he said. “We’re not sure yet but we have to do what is right for the businesses.”
Posniak said Paladar, which operates under Alante 2 LLC, has retained Mannatt Phelps & Phillips LLP to appeal the judgment. If they lose, he said, Alante 2 may have to file for bankruptcy protection, which would zero out the money doled out by investors.
“We are in the middle of re-strategizing our legal position,” he said. “Once (the appeal) is decided we can then figure out what to do next.”
When Nathan and Posniak withheld payment from Kaufman Carrara, whom the restaurateurs alleged were overcharging and providing faulty work, the contractor couldn’t pay its bills and filed for Chapter 7 bankruptcy.
Principal Jeff Carrara said he had to sell his home in order to pay his workers and still hasn’t fully recovered from the financial fallout of the bankruptcy.
The lawsuits were pressed by the construction company’s bankruptcy trustee and all money collected will go to pay Kaufman Carrara’s creditors, said attorney Larry Rothstein, who represented the trustee. “We tried to settle with them for three years,” Carrara said. “We were doing four clubs for these guys. They had us stretched over a barrel.”
Nathan and Posniak hired Kaufman Carrara in 2001 to build its three Hollywood ventures after opening Tengu, a Japanese fusion restaurant in Westwood Village, a year earlier.
Posniak said things started out smoothly but then Kaufman Carrara began filing work orders that substantially raised the cost of construction. Carrara said the orders were laid out in the contract. “Look at the paper trail and there’s nothing that’s confusing,” Carrara said.
Shrinking empire?
Nathan and Posniak, originally from South Africa, were some of the earliest believers in Hollywood and were responsible for attracting celebrities to their nightclubs and restaurants.
But now that empire may be shrinking. Besides possibly shuttering Paladar, Nathan and Posniak earlier this year sold Ivar, a popular spot where Hugh Hefner often threw parties celebrating new issues of Playboy magazine.
Posniak said the sale had nothing to do with the lawsuit and had been a planned divestiture. A group of employees pooled their finds to buy the hotspot for an undisclosed sum. “Nightclubs only have a certain lifespan and at certain times they need to be reinvigorated,” he said. “The new owners can do that very well.”
Michael Bong, a managing partner at Ivar, wouldn’t say who the nightclub’s investors are or whether they are all new owners. But he did say that Nathan and Posniak were no longer involved in the business and didn’t come around the club anymore.
“There were certain imperfections within the existing business plan and business model but we intend on fixing those,” he said. Bong wouldn’t provide more details.
The duo’s other restaurants continue to do well, Posniak said. Besides Tengu, Paladar and Nacional, the group owns a Santa Monica steakhouse call Lincoln and manages the Nine Thirty restaurant at the W Hotel in Westwood and Venice Cantina, a Mexican restaurant in Venice Beach.
David Gadja, the landlord of Ivar, said he never had any problems when Nathan and Posniak owned the nightclub. He said the partners paid their bills and maintained the building. “They always paid the rent on time,” he said. “Can’t say that about all my tenants.”
While Posniak and Nathan have threatened to put Paladar in bankruptcy, Rothstein said even if they did, the court could still capture most of the money.
He said that $100,000 of the Paladar judgment can come from the forced sale of the building at 1651 Wilcox Ave. And he said the Nacional settlement has been broken up into four payments, and the partners have already made the first payment.
“These guys tool around town in very expensive automobiles and have a very successful empire of clubs and restaurants,” Rothstein said. “If we could show Alan and Anton were taking huge sums of money out of their businesses we could hold them personally liable for (the Paladar judgment).”
