December 20, 1911

CAFE BEAUX ARTS IN CREDITORS HANDS

Bustanoby Brothers Make an Assignment To Avoid Going Into Bankruptcy

Family Had A Falling-Out

Louis Bustanoby Foreclosed A Mortgage, Which Brought Firm's Difficulties To A Crisis

Bustanoby brothers, proprietors of the Cafe des Beaux Arts, at Sixth Ave. and Fortieth Street, and the Beaux Arts Casino at Huntington, Long Island, made an assignment yesterday for the benefit of their creditors. Neither of the restaurants will be closed. The present difficulties date back to two years ago, when family troubles led to lawsuits between Andre and Jacques Bustanoby, who now control the business, and Louis Bustanoby. The latter accused his brothers of endeavoring to drive him out of the business.

A. A. Anderson, owner of the Cafe des Beaux Arts building, tried to make peace, one of his decisions being that none of the immediate members of the brothers families should enter the restaurants under pain of causing the head of his family a severe fine. The arbitration peace plan did not work well, and Louis finally retired. He is now running the restaurant in The Flat Iron Building. Baylas and Sanborne, attorneys for the Bustanobys, made a rough estimate of the assets of the corporation as $400,000, with liabilities a little more than that figure. Most of the assets are bound up in the Huntington property in which the firm put over $400,000, and on which there is a mortgage of $250,000.

The Huntington restaurant is now closed, as it always is in the Winter. They leased the lower floors of the New York building from A. A. Anderson and this lease has about ten years to run.

Fredrich H. Sanborn and David B. Simpson of 165 Broadway, are named as assignees, and they will conduct the Cafe des Beaux Arts for the benefit of the creditors. A statement made by the Bustanobys last night regarding the assignment says: This action was brought about by their brother Louis Bustanoby, to which a chattel mortgage was given as additional security for his one-third interest which was purchased by his two brothers, Jacques and Andre, last year. When this mortgage was given to Louis, they warned him not to record it, because the creditors will feel uneasy, demand their money, and naturally it would be impossible to take care of all of them at one time, as the business was not in a position to turn readily into cash all of the assets in real estate. However, their brother Louis did record the mortgage, and also foreclosed, which started a run. This course of action is regrettable, as the receipts of the Beaux Arts are forty percent better than those of last year and a great deal higher than any previous year.

When Louis retired, Andre who is now president and Jacques who is secretary took over his interest amounting to $110,000 worth of stock agreeing to pay the amount in four equal annual installments. The first note of$25,000 with interest, was paid promptly. When the second note became due last fall the demands of the other creditors were so pressing that it was decided to meet these first and in lieu of the note a chattel note on the furnishings of the Fortieth Street restaurant was given to Louis. By recording it, in addition to making addition trouble for the brothers, he is now, instead of a preferred creditor on a par with the other creditors and is a co-stockholder with Andre and Jacques, as according to the agreement, if the notes were not paid Louis had the privilege of withdrawing his stock from a trust company, where it had been desposited, and this Andre Bustanoby's representative said last night, had been done. After a consultation with their lawyers, Andre and Jacques decided that the easiest way out of the existing financial difficulties was to make an assignment instead of going into bankruptcy and winding up the business. The conference between the assignees and the creditors will be held within the next few days.