Keith’s Bar Operator In Legal Mess

Boomtown Entertainment allegedly took millions of dollars from developers and others to build new sites nationwide, but left the venues unfinished. Meanwhile, Boomtown’s been shuttering locations left and right amid allegations it failed to pay landlords, contractors, suppliers and even state sales taxes. An investigation by the Arizona Republic found Boomtown closed 17 of its 20 Toby Keith restaurants in the past 18 months, while at the same time announcing plans to build new locations that were often left unfinished or never started.

An attorney for Boomtown, Jess Lorona, explained to the Republic that the decisions regarding the openings and closures “were financially based.”

“Many stores lost money from opening and would ultimately be closed. Others that were open for a period of time would start to lose money and would ultimately need to be closed,” Lorona said. Boomtown isn’t the only operator of the restaurants out there, but it became the largest in recent years. The paper reported Keith, who collects revenue on naming rights but is not an owner in the chain, also licenses the name to a location at Harrah’s Las Vegas and three locations operated by another restaurant group in Oklahoma, all which appear to be running smoothly.

Court documents in the investigation note Boomtown has been sued in Michigan, Oregon and California by mall owner Rouse Properties, which alleges “Boomtown has concocted a scheme (whereby) it agrees with landlords to apply (tenant improvement) payments to specific locations but then uses the TI payments to cover costs at other Boomtown locations or for other reasons.”

Those cases have resulted in around $2.4 million in judgments against Boomtown thus far, but that’s not the extent of the company’s troubles. Cases in Georgia, Idaho and Virginia ended with courts awarding $14.4 million total in default judgments against Boomtown, the paper said, after the company simply failed to plead or defend itself in court. When questioned by the Republic about the default judgments, Lorona said he was unaware and would have to look into the cases, but added the lawsuits don’t reflect a pattern for the company.

“I don’t believe that Boomtown or Toby Keith’s (restaurants), based on what I know, is experiencing financial (problems),” he said. “I guess on its face, it looks like that.”