CINCINNATI — Two months into the rescue mission for Clifton Market, the effort is drifting toward foreclosure.
That doesn’t mean the comeback will falter, but it is more complicated than it seemed in November, when restaurant owner Gurmukh Singh won the support of Clifton Market shareholders by offering $1.8 million for the store and all of its assets.
“We’re still going to try to work a deal,” said attorney Eric Goering, who represents Clifton Market. “I need to submit a formal offer to (lenders). But we can’t do that until we know the buyer has financing to do the deal.”
Singh, owner of Elephant Walk restaurant in Clifton Heights, did not return WCPO's calls before this story was published. But in an interview late Thursday, Singh said he delivered his commitment letter on a Small Business Administration loan to his attorney this morning. He declined to provide financing details, but said the loan's approval was delayed by the federal government shutdown.
"Goering should have it today," he said. "Now, he has his work cut out for him trying to satisfy everybody."
Clifton Market has operated since 2017 as a neighborhood cooperative that replaced a closed IGA store at 319 Ludlow Ave. It’s had a troubled history, racking up about $6 million in total debt by the end of last year when it was losing about $30,000 a month.
Singh took over day-to-day management of the store in mid-November as part of his offer to buy Clifton Market. Goering is a bankruptcy attorney, hired by the Clifton Market board to evaluate Singh’s offer and advise shareholders on how to proceed.
Goering said in December that the purchase price might be enough to satisfy three lenders whose $3.1 million in mortgage debt was secured by the real estate at 319 Ludlow. But the recent court filings indicate that mortgage debt is now more than $3.2 million – and climbing.
Arlington, Virginia-based National Cooperative Bank filed the foreclosure lawsuit in Hamilton County Common Pleas Court Dec. 19. The bank claims it was owed $1.9 million as of Dec. 17, with interest accruing at $654 per day. NCB seeks a court order to sell the property so its debt can be satisfied. An attorney for NCB declined to comment on whether the bank is open to negotiating a settlement.
Minneapolis-based Shared Capital Cooperative claims it is owed $1 million plus 7.5 percent interest since August 2018.
Shareholder Robert Bergstein joined another company, RA Third Street LLC, in a third claim on Clifton Market’s assets. They were owed $247,000 at the end of 2018, with interest still accruing, according to their court filing.
Goering answered NCB’s foreclosure complaint with a series of arguments that dispute the amount owed and assert that NCB failed to mitigate damages and follow necessary procedures in filing its complaint. He also asked for the foreclosure case to be dismissed.
In a separate action, the Ohio Bureau of Workers Compensation secured a $9,629 judgment against Clifton Market Jan. 9. It has a lien against the property for an additional $38,573.
Goering said NCB’s foreclosure action does not ask for a receiver to take control of the store. That means Singh will likely have several months to strike a deal with lenders before the court orders the property to be sold. It’s also possible that a new buyer emerges.
“I’ve had other calls of people who may be interested but no other offers,” he said.