Austin Landmark Closes After 31 Years
From the time he opened Katz’s Delicatessen in 1979, Austin has known Marc Katz as the “Pastrami King.” Known for its reubens and other New York deli classics, the restaurant quickly became a star in the Austin restaurant scene. Unfortunately, after 31 years, Katz’s Deli, which boasted the slogan “Katz’s Never Kloses,” closed its doors for the last time on January 2.
The decision to close the restaurant came nearly six months after the deli’s parent company, M&M Katz Inc., filed for bankruptcy for the second time. The company’s filing listed substantial debts, including $161,637 to the Internal Revenue Service and $52,635 to the Texas comptroller for unpaid sales taxes. Although Katz’s saw revenue of $582,548 from July 21 to October 31 of last year, it still posted a loss of over $60,000.
Small Businesses Hit Hard
Like many other small businesses, Katz’s suffered in the recent economic collapse and was simply not able to weather the storm, despite its iconic status and fairly brisk sales. Although Katz admits he was slow to respond to rising costs and declining economic conditions, perhaps the biggest factor in the restaurant’s failure was its lease.
While M&M Katz Inc. once owned the building that housed the restaurant, the company was forced to sell it to cover debts in 2004. The restaurant worked out a deal with the building’s purchaser to remain in its original location, but the terms were harsh: court records show that Katz’s deli paid $22,478 per month in rent. Indeed, in a recent interview with the Austin Business Journal, Katz called agreeing to the crippling lease terms his “biggest mistake.”
An Experienced Lawyer Can Help
An experienced Austin business attorney can provide small businesses with the counsel they need to stay successful. Many businesses need the expertise of a business lawyer to help draft and negotiate terms of a lease. Other businesses find themselves in financial trouble and need help with financing or refinancing.
No matter the issue – be it contract disputes or corporate litigation – a knowledgeable business litigation lawyer can help. For more information, contact an attorney today.
