Wednesday marked five weeks since Short Hills Caterers closed its doors, and its clients are still scrambling to recover thousands of dollars in deposits while former employees wonder what went wrong.
"Unfortunately, the Short Hills Caterers has been operating at a deficit for many years," Richard Honig, the attorney representing the company and its owner, Michael Bienstock of Englewood, told The Jewish Standard earlier this week.
Photo by Johanna Ginsberg/New Jersey Jewish News
Honig, of the Newark firm Hellring Lindeman Goldstein & Siegal, maintained that all of the company’s creditors, including clients who had paid deposits of anywhere from $4,000 to $15,0000 for events booked through ‘010, would receive their money back after the company is liquidated.
Who will oversee the liquidation process, however, is being challenged. Earlier this month, a lawyer representing three former clients filed a petition to place the liquidation process under federal auspices.
According to Steve Jurista of Wasserman, Jurista & Stoltz in Millburn whom Short Hills appointed to liquidate its assets the company’s debt is valued at approximately $500,000. The value of the 46-year-old company is "at least $1 million," he said. Jurista is confident that the proceeds from the proposed sale of the company will more than settle debts with creditors as well as refund deposits to all of the caterer’s clients.
Jurista has been working since April 18 to liquidate Short Hills’ assets, but on May 8, Stuart Nachbar, a lawyer representing three former Short Hills clients, filed an involuntary bankruptcy petition in federal bankruptcy court in Newark. If Short Hills is forced into involuntary bankruptcy, a federal court would oversee the company’s dismantling and appoint its own representative rather than an attorney chosen by Short Hills’ representatives to liquidate the company’s assets. This would also guarantee remittances to all of Short Hills’ creditors, Nachbar said.
"All the people who have claims against Short Hills Caterers would be involved in a singular case where everybody is treated according to bankruptcy code," he said. "Unsecured creditors share in whatever assets are left after secured creditors are paid off."
A hearing is scheduled for May ‘7 to decide the fate of the bankruptcy proceedings.
Until a decision is reached, Jurista’s work remains on hold.
Although Jurista and Honig said that all clients would be reimbursed, Nachbar said it is impossible for them to make that claim because nobody knows the extent of the damages owed.
Beyond just the return of their deposits, Nachbar said, former clients are owed damages that include the costs of switching to other caterers, reprinting invitations, and other costs associated with changing event dates.
"So how can Mr. Jurista and Mr. Honig make statements that there will be enough money to pay back all the creditors when we do not know what the claims are?" Nachbar said.
The catering company’s financial problems have long been simmering. Short Hills sold its liquor license last summer to Cheesecake Factory for $600,000, which allowed it to pay off its then-current debts, Honig said. But more debt accrued, and Bienstock’s financial advisers told him that $’50,000 had to be invested in the business to keep it running through the fall.
Bienstock was convinced filing bankruptcy with the intent to reorganize would tarnish the company’s reputation, and Short Hills would not be able to attract new clients, Honig said. The two reached the decision to shutter the business between April 14 and April 15.
With the next scheduled party on May 10, Bienstock informed his employees of his decision on April 16, and the company officially closed on April 18.
"It was a family business for 46 years. It was a gut-wrenching decision to close," Honig said. "We didn’t want to get to the point we’d have to close on a Wednesday and there would be a party scheduled on a Saturday. Three-and-a-half weeks’ notice is better than three-and-a-half days’ notice."
According to former assistant general manager Joey Kenjorski, Short Hills employees knew nothing of Bienstock’s discussions or financial woes and were still accepting deposits as of April 14. Kenjorski recalled making a bank deposit of $11,000 that day.
"There’s no way I would have gone to the bank and deposited money if I knew we were closing," she said.
Employees are angry at Bienstock for keeping them in the dark for so long about the company’s finances.
"There should have been a point where the owner said we’re going to be closing the doors," said Kenjorski, who held her own wedding at Short Hills just six weeks before it closed. "None of us would have walked out the door. We wouldn’t have just left. We worked as a family, we were all trying to help each other out."
When Short Hills sold its liquor license last year, Bienstock allegedly told the staff that the money would go toward upgrading the banquet hall, not paying down debt, said former general manager John Bowes.
Last week, Bowes began a new job at Wilshire Grand Caterers in West Orange. Kenjorski and other employees have not been as lucky.
"It put us all in a really, really bad position," Kenjorski said. "You have people from every end of the spectrum who don’t need to work and have savings, people who need to feed their children, and people who could barely pay their mortgage even with a full-time job."
After the closing became public, Bowes called more than 60 of the caterer’s clients to explain the situation and help them find quick alternatives.
"I basically spent 40 minutes on the phone with each client," he said. "It’s devastating. A lot of people are saving up money for their son or daughter’s bar or bat mitzvah and if they’re out $10,000 or $15,000, it’s hard."