Mt. Kisco Diner has filed for bankruptcy protection citing an inability to pay nearly $1 million to employees who accused the business of a “veritable smorgasbord of legal violations.”
Three Diamond Diner Corp., the corporate entity, filed a Chapter 11 reorganization petition March 10 in federal bankruptcy court in White Plains.
The “immediate need for relief,” Photios “Frank” Georgiou stated in a court filing, was prompted by “severe cash flow difficulties stemming from the settlement of disputed labor claims.”
Frank Georgiou and co-owner Panayiota “Yiota” Georgiou of Yorktown Heights, and manager Charalambos “Harry” Georgiou of Rosyln, Long Island, simultaneously filed nearly identical Chapter 11 petitions that are being jointly administered with Three Diamond.
Mt. Kisco Diner, formed in 1994 and operating at 252 Main St. in Mount Kisco, promotes itself as an “upscale casual restaurant.”
Last year, three former employees filed a class action lawsuit accusing the diner and the Georgious of violating the federal Fair Labor Standards Act and New York Labor Law.
Julissa Morales, a hostess, Aidee Geronimo-Romero, a waitress, and Ady Garcia, a busser, claimed that the Georgious failed to pay employees the minimum wage, required them to work long hours but denied overtime compensation, cheated them out of tips, falsified records and created a hostile workplace.
Geronimo-Romero, for instance, said she worked six days a week, for 59 hours, and was paid a flat rate of $20 a day (about $2.03 an hour).
The employees are predominantly Hispanic, according to the lawsuit, and they were allegedly subjected to a barrage of insults that non-Hispanic employees did not incur.
They claimed they were called dirty pigs when they were compelled to work while ill, for example, lazy when they took breaks and incompetent “when their work was even slightly imperfect,” such as using two staples instead of one on a customer’s receipt.
When they complained about not getting tips, the lawsuit alleged, they were fired.
Garcia, for instance, claimed she protested a proposed policy whereby the Georgious would retain 8% of the tips for themselves.
Yiota Georgiou allegedly responded by calling her a nobody who was ungrateful for her job, and told her, “in this country, you don’t matter.”
The Georgious broadly denied the accusations in their answer to the complaint.
In December, the diner and the Georgious agreed to a $900,000 settlement with 11 employees.
The defendants denied the allegations and admitted no wrongdoing, the settlement states. They also agreed to get training on “discrimination and responsible and compassionate policies.”
A bankruptcy filing states that Three Diamond “experienced cash flow difficulties … and has not been able to pay the settlement.”
The four bankruptcies each claim $50,000 or less in assets and up to $1 million in liabilities. They list $996,000 owed to employees, ranging from $24,000 to $104,000, and classify the debts as disputed.
The schedule of unsecured claims also includes unspecified amounts owed to the IRS and New York Department of Taxation and Finance.
Frank Georgiou estimated revenues of $580,000 during the first month of operations under bankruptcy, and $540,000 in expenses.
Their intention, according to the application for joint administration, is to reorganize the business and “pay the creditors over time.”
The diner and restaurateurs are represented by Manhattan attorneys Brian J. Hufnagle and Lawrence F. Morrison.
The workers were represented in their lawsuit by Maureen Hussain, Laura Revercomb and Robert McCreanor of the Worker Justice Center of New York in Kingston.
This article appeared on Westfair Online