The parent company of Cocktail Bar & Grill, a popular bar on the North Halsted Street nightlife strip in Boystown, filed for Chapter 11 bankruptcy protection Sunday and will undergo reorganization, according to the business’s lawyer.
The move comes just six months after Cocktail owner John “Geno” Zaharakis reopened the bar at 3359 N. Halsted St. amid an ongoing lawsuit against his landlord and a former bar manager. Since it reopened, Feb. 10, the bar has steadily returned to full operations, including offering a food menu and outdoor seating along Roscoe Street.
“I think it’s a really positive, good move for Geno and Cocktail,” said Zaharakis’ attorney, Jacob Meister. “We have seen lots of companies in this economy have to restructure their businesses and it’s often — if not generally — a very good step for a lot of companies experiencing difficulty.”
Entering bankruptcy protection in federal court will effectively halt any further proceedings in the Cook County Circuit Court lawsuit Zaharakis’ With A Stick Inc. filed against his landlord, Robert Brumbaugh, Jr., last summer. Brumbaugh accuses the company of owing thousands of dollars in unpaid rent.
That lawsuit would continue when the company is able to emerge from bankruptcy protection.
Brumbaugh’s actions, alleged in the suit, as well as the condition of the economy led Zaharakis to enter bankruptcy protection, Meister said. With A Stick and Zaharakis will have 120 days after the filing to submit a reorganization plan to the court. Those plans have not yet been determined.
Last November, the bar was forced to close when its liquor license was revoked by the state due to unpaid taxes.
Meister said that although he is not a bankruptcy lawyer, the proceedings could take years. The bar will continue to operate normally as restructuring the company goes forward, according to Meister.
“I think cocktail is going to remain a vibrant part of Chicago for a long time to come,” he said.
A call made to Zaharakis for comment were not immediately returned. Brumbaugh’s lawyers also could not be reached.