The Española company that owns both La Cocina and Los Arcos restaurants filed for bankruptcy Sept. 16 in federal District Court.
Restaurant manager Javier Sanchez, who also runs the Fairview Café, said the restaurants will continue operating with the same hours, menus and employees.
“It doesn’t mean anything for customers,” Sanchez said. “We still intend to stay open for business, and we think this is the best way in order for us to do that.”
According to the company’s court filings, Emily Maestas Inc. owes the IRS $340,978, along with substantial debts to the state Taxation and Revenue Department, Los Alamos National Bank and U.S. Foods.
Attorney George Moore, who represents the company, said chapter-11 bankruptcy protects it from attempts to collect those debts, and allows it time to propose a debt-restructuring plan. Moore said the business suffered from basic cash-flow problems.
“They were borrowing working capital on what I would have to describe as unfavorable terms,” Moore said.
Sanchez said the bankruptcy was not related to former Española judge Charles Maestas’ (his family owns the restaurants) legal fights.
The company apparently got into tax trouble last year. According to documents filed with the Rio Arriba County Clerk’s office, a federal tax lien was placed against the company in April 2008, for over $83,000 in unpaid employment taxes from the last two quarters of 2007.
The taxes on which the company defaulted go into Social Security and Medicare funds, and to federal taxes, IRS spokesman Bill Brunson said.
That doesn’t mean Los Arcos and La Cocina employees will see a reduction in federal benefits, Brunson said.