The Thatched Cottage, a catering hall located in Centerpoint, Long Island, has filed for Chapter 11 bankruptcy in an effort to reorganize while staying open to accommodate the dozens of weddings that have already been scheduled, as reported by the Long Island Newsday.
According to business owner R.C., 58, "I would have had to cancel on 150 brides. Instead…I am battling the storm on my own to make everyone happy."
The bankruptcy is partially blamed on Tropical Storm Irene and Superstorm Sandy for the costs in having to repeatedly repair damages to the property.
The Thatched Cottage, considered an historical landmark by local business leaders, is known for hosting several types of events: weddings, bar and bat mitzvahs, political and civic events, and the area's first same-sex prom.
The co-chairman of the Huntington Township Chamber of Commerce, R.B., commented, "It is literally part of the fabric of the community."
The building was first opened as a restaurant in 1915. Approximately 26 years ago R.C. purchased it and turned it into a catering facility, eventually closing the restaurant.
According to R.C. during the two storms Thatched Cottage was flooded. The storms left damages to the floors, walls, electrical, carpeting, roof, and both heating and air conditioning systems.
While paying to repair the damages R.C. obtained a second mortgage, believing that the federal government – with a business loan and insurance reimbursement – would aid him. However, R.C. said that the funds never amounted to much.
R.C. "needed some breathing room" so he felt compelled to file the bankruptcy paperwork.
Since Superstorm Sandy there have been 81 Chapter 11 bankruptcy filings in Long Island. However, the year before the disaster there were 100 filings.
Bankruptcy Attorney Jil Mazer-Marino commented, "It's not to say they weren't affected by the storm, just that bankruptcy doesn't present a way to necessarily help them" and that she's seen many businesses trying to work things out with lenders as opposed to using the courts.
Huntington-based attorney Avrum Rosen is representing R.C. in the bankruptcy. Rosen said that the property was refinanced in August of 2011 – before Tropical Storm Irene – and part of the refinance allowed that they have the proper insurance in place for a future flood.
R.C. added flood insurance, however, according to Rosen, the broker failed to add it to his policy.
When R.C. applied for a Small Business Administration loan it was rejected – because he didn't have the flood insurance in place when the storm damaged the building. R.C. appealed the denial and now expects to obtain a $2 million low interest loan.
After Superstorm Sandy hit in October 2012 R.C. borrowed money again to do the necessary repairs. His grand total of expenditures to pay for both storm's damages came to approximately $3 million, according to Rosen.
In 2015 R.C. is expecting to be clear of his debts and be celebrating the 100th anniversary of the Thatched Cottage. He commented, "This is my love, this is my life."
Headed toward bankruptcy? If you are overwhelmed by personal or business debts contact a bankruptcy attorney for help today!