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As a subscriber you can listen to articles at work, in the car, or while you work out. Subscribe NowThe Athenaeum Foundation is suing the operator of The Rathskeller restaurant in downtown Indianapolis, accusing its tenant of incorrectly splitting revenue from Biergarten cover charges with the foundation.
Filed in Marion County last week, the suit centers on a lease agreement that stipulates the Athenaeum and the Rathskeller operator, Dan McMichael Inc., would evenly split the revenue gathered at the door for concerts hosted at the restaurant’s biergarten — an outdoor space where guests can drink beer, eat food and watch live music.
The president of the operating company is R. Daniel McMichael, who has overseen the Rathskeller since 1995.
The foundation holds that admission revenue to the venue should be split in half before any deductions are made for bands, saying McMichael wrongfully allocated performer guarantees and base compensation against the foundation’s share of the admissions.
McMichael told IBJ on Friday that he strongly disagrees with the lawsuit’s allegations.
“There is definitely a significant second side to the story that (should) be told,” he said. “We are hoping for a reasonable negotiation with the foundation to cure our differences.”
According to a lease addendum attached to the lawsuit, “certain entertainer and band contracts require a payment of a portion of the Gate Admission Fees charged for the performance as a form of success fee or bonus based upon attendance at the performance.”
“When the contract requires such a gate fee participation clause, Landlord and Tenant agree that they will share in the remainder of the Gate Admissions Fees on a 50/50 split basis,” the addendum stated.
The parties may share in the deduction of certain band payments when the fees charged for the performance are in the form of a “success fee” or “bonus based upon attendance at the performance.”
But the foundation argues that McMichael has given performer guarantees regardless of attendance. The foundation says those guarantees “do not constitute a ‘success fee or bonus based upon attendance.'”
The foundation is now asking a Marion County court to clarify the meaning of the parties’ lease addendum, which stipulated the 50-50 split.
The foundation is also seeking the court to terminate McMichael’s lease and right to possess the premises for breach of contract.
The foundation’s attorney, Robert Daniels of DeFur Voran, said the lawsuit is meant to get clarity on the language of the lease.
Daniels said the lawsuit should not interfere with the restaurant’s operations, saying business will be “as usual.”
The Athenaeum, 401 E. Michigan St., dates to the late 19th century and early 20th century, when it was called Das Deutsche Haus. In 1918, its name was changed to the Athenaeum, according to its website. As of 2016, it is a designated National Historic Landmark.
The Rathskeller was established in 1894 and is Indianapolis’s oldest restaurant still in operation, according to the Athenaeum. It is located in the Athenaeum’s basement but has an accompanying outdoor biergarten that hosts live music.
McMichael said he feels the Rathskeller is an icon and has brought joy to thousands of people over the years.
“We hope that we’re able to continue on and continue to provide the Rathskeller experience for the city of Indianapolis for years to come,” he said.
The foundation and McMichael entered into a lease agreement for a portion of the Athenaeum, including the Rathskeller restaurant and Biergarten space, in 2003, according to the lawsuit.
The two sides also got in a dispute over cover charges in 2012 before coming to a settlement.
According to Daniels, the issues raised in the latest lawsuit have been happening for “some time.” Daniels did not provide a specific timeframe when asked on Friday morning.
The lawsuit states that the foundation issued McMichael formal notices demanding payment for the “wrongfully withheld” rent on April 20, 2026, and on July 8, 2026.
Aside from the performer and split deduction dispute, the foundation also alleges McMichael deducted “unilateral” repairs, alterations or additional expenses from his rent obligations without providing notice or getting consent — which it says goes against the lease agreement.
The case is The Athenaeum Foundation, Inc. v. Dan McMichael, Inc., 49D01-2608-CE-048187.
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