There is a time when you have to wonder if anything is sacred. The Mai-Kai Restaurant on North Federal Highway popped up on my radar screen because of an article announcing that the Temple of Tiki was slapped with a $2 million-plus foreclosure suit. The news caused a wild flutter online, even as one of the restaurant’s principals claimed that the matter had been resolved by press time. The restaurant and its property are on the National Register of Historic Places, but that doesn’t guarantee all will be well.
Complex Business and Complex Issues
Mai Kai has multiple dining rooms, is also an entertainment venue with Polynesian luau shows, and it has been in business for over 50 years. While I do not know anything about the actual books or business dealings, I can find some history that suggests the restaurant has faced foreclosure before. Simply going off the top of my head, I would suggest having a trusted forensic auditor go over the books, then implement a debt reduction plan, and perhaps even a restructuring or refinancing the existing debt at a better interest rate.
What about Bankruptcy?
When a business is deeply in debt, meaning that it cannot see a way to pay down that debt within five years, it is time to look at Chapter 7 or Chapter 11 bankruptcy. Very often, businesses get in over their heads without really intending to; it is especially easy in an economic downturn to end up in the weeds over bills and mortgages. In addition to that, long established businesses can develop bad financial habits. It can take a meeting with a US trustee to shine a harsh light on “things we’ve always done this way” that may have helped the business to slide into bankruptcy.
Reorganizing Your Business in Bankruptcy
For a large and complex business such as the Mai-Kai, Chapter 11 is the first stop to save the business. This is a reorganization bankruptcy, a longer and more complex procedure than Chapter 7, but one which will allow the business to exit bankruptcy with its debts reorganized in a more manageable and reduced repayment structure. It will take some time to rebuild its image, but with a positive cash flow and sound management, that should not be a problem. The Mai-Kai is an overwhelmingly popular restaurant with both tourists and locals and represents some of the last of Tiki culture from the heyday of the 50s and 60s. It’s worth saving, so go for happy hour, or go all out and take a party to dinner and the show.
If your business is staggering under a massive load of debt that makes it difficult to meet your obligations, it may be time to consider your Chapter 11 filing. You can consult with our experienced attorneys in Fort Lauderdale and West Palm Beach seven days a week, and your consultation is free of charge. We think that small businesses are worth saving, and part of what makes South Florida so unique and such a great place to live.