Jilted landlord seeks $875K from Amerigo parent

Owner of Knoxville property says Vivid left it a mess and defaulted on lease

Email | Print By E. Thomas Wood

Just as it prepares to exit a court-ordered receivership, the parent company of the Amerigo restaurant chain is facing a lawsuit from a former landlord that wants more than $875,000 in damages.

Corona Development LLC has intervened in the receivership case of Vivid Restaurant Concepts to accuse the Nashville company and its receiver, Kevin O'Halloran, of breaching lease obligations, damaging property and wasting assets through their "hasty and imprudent closing" of the Amerigo restaurant on Kingston Pike in Knoxville late in April.

In May, Vivid and its creditors agreed to the sale of most of its assets – not including any property related to the Knoxville outlet – to a new company run by Paul Schramkowski, manager of the Amerigo restaurant on West End and co-founder of Vivid, along with another restaurant manager in Mississippi.

Corona, a unit of Cappiello Real Estate based in Oak Ridge, filed its complaint last week in Nashville's U.S. District Court (copy at this link). It claims Vivid removed furniture, fixtures and equipment belonging to the landlord from the building when it shut down. Corona also asserts that it found the abandoned premises to be in an "unclean and unsightly condition."

The company asserts that receiver O'Halloran "ended Amerigo restaurant operations in a manner that wasted the assets of Vivid’s receivership, in that the receiver allowed at least one week’s worth food, stock, and inventory to be needlessly ordered and then unused" before the restaurant abruptly closed.

Most of the damages sought, however, relate to lease obligations. Corona says Vivid, besides being a couple of months behind on rent payments, is responsible for more than a half-million dollars in payments covering the remaining term of the lease, which runs through 2012.

Attorney Barbara Holmes of Harwell Howard Hyne Gabbert & Manner, representing O'Halloran, emphasized this afternoon that she does not expect the lawsuit to imperil the deal meant to take the company out of receivership. She noted that Corona has not filed an objection to the sale. Court records indicate that it has until July 22 to do so.

"The receiver disputes the allegations in the complaint and will be filing a formal response," Holmes said. "The Knoxville restaurant operations were losing money, which precipitated the closing. The premises were vacated in an orderly and professional manner."