Family members of a Kroger real estate executive who died following an altercation at Shotgun Willie’s in 2019 say the Glendale strip club’s recent bankruptcy filing “is an attempt to use the COVID-19 pandemic as a smokescreen to limit the debtor’s liability in six pending lawsuits.”
“The truth is that the debtor is a profitable company that will likely recover quickly from the pandemic and has the financial wherewithal to provide a significantly higher return to unsecured creditors,” the surviving wife and children of Randall Wright wrote in a March 24 court filing.
Wright was 48 when he died in May 2019 after being put into a chokehold by a bartender at the club, according to a wrongful death lawsuit his family filed five months later. The local district attorney’s office announced in September 2019 that it would not file charges in connection with the incident, citing multiple factors.
The club disclosed the family’s lawsuit and others pending against it when it filed for Chapter 11 bankruptcy protection in November. In a statement to BusinessDen at the time, Shotgun Willie’s attributed the filing to the pandemic, noting the club was prohibited from operating for weeks in the spring, and again around the time of the filing.
“We believe this action gave us the only chance of surviving in this uncertain climate and was unfortunately unavoidable,” the club said.
But the Wright family has asked the court to reject Shotgun Willie’s reorganization plan, characterizing the bankruptcy as just the latest example of the club’s “efforts to hide its ability to pay the Wrights” in the wake of the lawsuit.
The family notes that an entity called Glendale Holdings LLC was registered in August 2019, and ownership of the club’s building at 490 S. Colorado Blvd. was transferred to that entity in early 2020. The transaction was later reversed. Stephen Long, an attorney representing Shotgun Willie’s, previously told BusinessDen the transfer was done for tax purposes in case the club was sold.
While Shotgun Willie’s owns the building it operates in, it doesn’t own the land the building sits on. That is owned by Coal Creek Partners LLC, which is made up of some but not all of the owners of Shotgun Willie’s, according to the club. While preparing to file for bankruptcy, the club and its landlord determined they weren’t on the same page about how much the club owed, ultimately settling on a higher amount than the club’s original estimate, according to court documents.
The Wright family refers to the situation as “the debtor’s convenient discovery of additional debit to a related entity.” The family also questions the strip club’s forecast regarding how long it will take to get the business back to where it was before the pandemic. The strip club had revenue of about $7 million in 2019.
“The debtor projects that even five years after the most devastating economic effects of the pandemic are expected to subside (and despite widespread vaccinations already well underway as of the date of this filing), the debtor’s annual sales will still be approximately $4 million, significantly less than in the years prior to the bankruptcy filing,” the Wrights said in their recent filing. “This forecast is at odds with the views of most economic experts.”
The Wrights are represented in their objection by attorney David Warner of Littleton’s Wadsworth Garber Warner Conrardy. He is also representing another party that objects to the reorganization plan using similar language. The individual, Charles McClure, filed a personal injury lawsuit against the strip club in April 2020.
Models Lucy Pinder, Dessie Mitcheson and Carmen Electra have also objected to the reorganization plan. They sued the club in 2019, claiming Shotgun Willie’s was using images of them in advertising without permission or compensation.
Long, the attorney representing Shotgun Willie’s, told BusinessDen Thursday that a hearing on the objections is scheduled for June 1. He noted that the club’s reorganization plan has the support of the U.S. trustee and the Subchapter V trustee, Harvey Sender.
Long also defended the veracity of the financial projections that the Wrights described as “dour.”
“The projections that were submitted to the court were not our projections,” Long said. ‘They were projections by an independent financial analyst.”