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Cornell’s Restaurant in Schenectady will remain open as the company that owns the restaurant’s real estate reorganizes its debts in U.S. Bankruptcy Court, officials said today.

The real estate holding company, 39-45 North Jay Street Corp., filed for Chapter 11 to protect itself from creditors, including American Tax Funding, which handles tax liens for the city of Schenectady.

JoAnn Aragosa, owner of Cornell’s, said business at the restaurant is “outstanding,” with sales up more than 20 percent over last year. However, the restaurant owes $162,257 in property taxes, according to the bankruptcy petition.

“Once you fall behind on property taxes in this city, catching up is very hard due to the very high interest rates charged by the tax lien company,” Aragosa said. “Cornell’s is open for business and we are continuing to serve our many loyal customers.”

Among its creditors are the Schenectady Metroplex Development Authority, which is owed $224,000.

“The current Metroplex board had no role in this project,” Metroplex Chairman Ray Gillen said in a statement payday loans for self employed. “From reviewing financial reports submitted by the company, the problem at Cornell’s is not on the revenue side. The restaurant is very busy and revenues continue to grow. The problem is tax liens and debts which date back to the former Cornell’s location and the way this project was put together back in 2003 by the now defunct Schenectady Economic Development Corp. This project simply has too much debt and was poorly structured.”

Gillen said Chapter 11 appears to be the only viable option for the restaurant at this time.

“Metroplex will retain ownership of the parking lot used by Cornell’s and other businesses in the area,” Gillen said. “Metroplex also has a personal guarantee from the owner which it will pursue if necessary.”

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Filed under: economics by Finance Boss