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Owner of former Scotty’s Brewhouse location sued over closure

July 11, 2019

The owner of the Southport location of Scotty’s Brewhouse, which closed abruptly in April, is facing a lawsuit over the closure.

The Southport location, at 4530 Southport Crossing Drive, was owned by Johnson Hospitality Group LLC and managed by A Pots & Pans Production LLC, which provides management services for all of Scotty’s Holdings LLC’s restaurant locations.

On Tuesday, Pots & Pans sued Johnson Hospitality and its owner, Todd Johnson. The suit was filed in U.S. Bankruptcy Court because Scotty’s Holdings and related entities, including Pots & Pans, filed for Chapter 11 bankruptcy in December.

Because of its outside ownership, the Southport restaurant was not part of the bankruptcy, which includes only Scotty’s company-owned restaurants.

According to the terms of the management agreement for the Southport location, Pots & Pans was responsible for restaurant operations and Johnson Hospitality was responsible for providing the working capital to cover operating expenses.

In the lawsuit, Pots & Pans alleges that Johnson withdrew $33,524 cash from the restaurant’s operating account at Chase Bank between April 10 and April 12, leaving Pots & Pans with no money to cover operating expenses such as payroll and vendor payments.

Johnson also changed the locks at the restaurant on April 11, preventing employees from entering, the suit says.

In a subsequent hearing as part of Pots & Pans’ bankruptcy case, Johnson testified that he withdrew the money in order to force termination of the management agreement, the suit says.

Court filings do not indicate who is providing legal counsel to Johnson Hospitality Group in the case. IBJ left phone and email messages for Johnson on Thursday morning but did not receive a response by deadline.

The suit also says that Johnson Hospitality owes Pots & Pans $39,777 in management fees and a $50,000 termination fee.

As a result of Johnson’s actions, Pots & Pans said in the suit, it incurred financial damages of at least $114,000. That figure includes the management and termination fees, plus $24,300 in payroll obligations that it was unable to meet, and a yet-to-be-determined amount of unpaid vendor fees and other expenses.

Pots & Pans is seeking an award of actual damages plus punitive damages in an unspecified amount, court costs and attorney fees.

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