Mott likely must sell Crescent Beach to fund restaurant operations, receiver says

Embattled restauranteur Katherine Mott-Formicola very likely will be forced to sell the Crescent Beach Restaurant property in the town of Greece in order to meet the financial obligations of her dining and events enterprise.

Mott, business partner Robert Harris, three other associates and a variety of limited liability companies that comprise her restaurant empire were named in March as defendants in what Five Star Bank called an elaborate check-kiting scheme.

Five Star alleges the actions by the defendants cost the financial institution nearly $19 million.

Since then, court-appointed receiver Mark R. Kercher has been overseeing all financial matters related to Mott’s still fully operational businesses, including Monroes Restaurant, Rare 3001, The Wintergarden by Monroe’s and Divinity Estate & Chapel.

In his fourth monthly update to the court and to plaintiff Five Star Bank, which was filed Friday in U.S. District Court in the Western District of New York, Kercher said it’s very likely that additional working capital will be needed to maintain operations.

That capital would be generated “through the sale of other non-core assets, specifically the Crescent Beach property,” Kercher’s report said.

Mott acquired the long-vacant lakeside restaurant on Edgemere Drive in November through 11 Wexford Glen, LLC and immediately began renovations. She had hoped to reopen the landmark property by spring of this year.

Shuttered for more than a decade, Crescent Beach was once a revered destination for dining and special events. Mott had intended to bring the past back to life.

However, the civil lawsuit filed by Five Star Bank resulted in a freezing of her company assets and brought construction to a halt. There now is at least one construction lien on the property.

Kercher’s report says a sale of Crescent Beach would “eliminate its original purchase money debt obligation and subsequent construction lien.” He said there also could be additional proceeds that would be used to meet other operating expenses.

She already sold two rental properties, using that cash infusion to maintain business operations, the report said.

Kercher’s report said his efforts at managing the financial situation of Mott’s many businesses in August “largely focused on weekly, even daily, cash projections, determination of vendor priorities and authorizing payments based on cash availability.”

Operating cash flow increased in August thanks to summer activity at the venues, enabling the defendant to meet payroll without reducing the workforce while also keeping all “critical food and beverage vendor payments current,” he said.

All lease obligations and insurance also were kept current. The only delinquency, Kercher said, was New York State sales tax.

“Going forward, I believe the working capital generated by asset sales will be essential to satisfy sales tax and other obligations,” the report said.

Mott no longer operates the restaurant or event space at Ridgemont Country Club in Greece, and the dispute between the restaurateur and country club was described as “contentious” Kercher’s August report.

Monroe’s at Ridgemont LLC departed the venue on Aug. 15 after learning club management was changing the locks, Kercher’s report said.

The restaurant operator removed its equipment and property that day, then sold it for $180,000, $115,000 more than Ridgemont offered.

The parties remain at odds over lost revenue from events, unpaid rent and unpaid member minimum spend balances, according to Kercher.

His report said he has received full cooperation by management of the defendant’s entities as well as from Five Star Bank.

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