Tosh’s Hacienda, which owes Denver $1.9 million, declared bankruptcy Thursday.
The Mexican restaurant, already in foreclosure proceedings, has a decade-long history of delinquent loan payments to the city and has not made a payment in 16 months.
The Chapter 11 filing may delay the city’s efforts to foreclose on the restaurant. Tosh’s, 3090 Downing St., has been in business for nearly 60 years and continues to operate.
How much money the city will be able to recover is unclear. If Tosh’s closes and is foreclosed upon, the city would try to find an operator who would assume the loans in some manner.
If not, the city would recoup only a fraction of its money, said John Huggins, the city’s economic development director.
“We will continue to vigorously pursue every available legal avenue to get what the city is owed,” he said.
Tosh’s owner, Salvador Mackintosh, and his attorney could not be reached for comment Thursday.
Last month, Mackintosh said the business suffered a series of setbacks that were out of his control over the past two decades, including Denver’s economic woes and the oil bust in the mid-1980s.
As part of Thursday’s bankruptcy filing, Mackintosh submitted an emergency motion to sell his current working capital for cash to run the business. The collateral includes $600 in the till, $1,000 in a checking account and nearly $15,000 in food, beverage, liquor and restaurant supplies.
The city has not decided whether to fight the motion.
“We’re not sure if we think it’s in the city’s financial interests that the restaurant keep operating,” Huggins said.
Tosh’s was pointed to recently as a prime example of problems plaguing the city’s loan program.
The restaurant had been delinquent on three loans 85 percent of the time since 1994. Even so, under former Mayor Wellington Webb’s administration, Tosh’s was handed another loan – this time for $1.5 million. Tosh’s was delinquent 50 percent of the time since 2000. Again in 2003, the city loaned Tosh’s another $275,000 for cost overruns.
All the loans were made before Mayor John Hickenlooper took office. Huggins has said that they would not have been made on his watch.
Staff writer Karen Crummy can be reached at 303-820-1594 or kcrummy@denverpost.com.
