Business

Boise bar owner says bankruptcy filing ‘a moral stand’ in legal battle with vendor

The owners of Fatty’s Bar, 800 W. Idaho St., filed for bankruptcy Friday as a means to “protect” the business from “dishonest and unethical” claims by another company.
The owners of Fatty’s Bar, 800 W. Idaho St., filed for bankruptcy Friday as a means to “protect” the business from “dishonest and unethical” claims by another company. nblanchard@idahostatesman.com

A Downtown Boise bar owner told the Idaho Statesman on Sunday that his business’ recent bankruptcy filing was “the only way to protect” it from “dishonest and unethical” claims by another company.

Fatty’s Bar LLC filed for Chapter 11 bankruptcy Friday, court documents show. But owner Steve Masonheimer said in a phone interview that he doesn’t have any plans to shutter the business.

The Idaho Press first reported the bankruptcy.

Masonheimer has owned Fatty’s for six years. He said the bankruptcy filing stems from a dispute with Alsco, a nationwide workplace linens vendor. He alleged Alsco is seeking $50,000 for a “future five-year contract” that was initially made with a former Fatty’s owner, Tons of Fun LLC.

While Tons of Fun did business under the name Fatty’s in the same space at 800 W. Idaho St., Masonheimer said his dance club isn’t related to the previous company — which went out of business — and therefore shouldn’t be on the hook for the contract. He said the Fatty’s name was never registered with the state until he did so, and he never was involved in any sort of transaction with the former owners to continue their business.

“The people (who made the contract with Alsco) don’t work here anymore. There was no buyout, nothing,” Masonheimer said.

Last month, however, a district court ruled in favor of Alsco, according to online court records. Masonheimer’s bankruptcy lawyer, Matt Christensen said Sunday that the bankruptcy filing was “done on an emergency basis Friday” in response to collections activity.

The Statesman has reached out to Alsco for comment.

Christensen said Fatty’s Bar LLC is in the process of appealing the district court’s judgment. He said he’s optimistic about the company’s bankruptcy proceedings.

“They have a good chance of reorganizing (debt). Absent this Alsco filing, they wouldn’t have needed to file for bankruptcy at all,” Christensen said.

Masonheimer called Alsco’s contract practices “unethical” and said he’s fighting the claim as a matter of principle.

“They’re offered me a settlement that is fractions of (the $50,000) they’re asking for, but it’s a moral stand. It’s not just for me. We don’t need this kind of thing in our town,” Masonheimer said.

And, he repeated, Fatty’s “is here to stay.”

“Chapter 11 is not going out of business. It’s just a restructuring of debt,” he said.

The bankruptcy filing shows Fatty’s Bar LLC has up to $50,000 in assets and $230,000 in debt, including $42,000 for Alsco, which is labeled as a “judgment creditor.”

Masonheimer he’s reaching out to his other vendors to ensure they know the bankruptcy filing won’t affect the business’ ability to pay its partners.

“They will be paid just as they always have been paid,” he said.

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