Great Lake Seafood Restaurant bankruptcy documents reveal $180,000 dispute
The parent company that owned Great Lake Chinese Seafood Restaurant, filed for Chapter 7 bankruptcy less than one month after the Pittsfield Township restaurant closed its doors.
Kin Kwok Yue, one of the shareholders of New Win System International Corp., is accused in the bankruptcy filing of taking distributions of as much as $180,000 from the restaurant's funds.
Great Lake Chinese Seafood Restaurant, formerly located on Carpenter Road in Pittsfield Township, closed May 14.
Ben Freed | AnnArbor.com
The court documents appear to indicate a dispute between Yue and the company’s four other shareholders related to the company’s accounting books.
Yue, listed as a 21.667 percent stakeholder of the company, is in possession of all of the company’s accounts and records, according to a filing.
The company’s bank account is reported as containing $315 at the time of the filing.
According to the filing, “the amount Mr. Yue may have received is unclear due to his failure to turn over records to fellow shareholders.”
According to court documents from the United States Bankruptcy Court for the Eastern District of Michigan, New Win System International Corp. claims that it now only has about $95,400 in assets to pay off over $230,000 in debts.
The company’s assets primarily consist of a liquor license valued at $50,000 and equipment, utensils and cookware from the restaurant that have an estimated value of $45,100.
Priority claims on the restaurants debt are held by a number of employees who are owed back wages, including one person who is owed $6,077.90 for time worked in 2012 and 2013, and by the State of Michigan.
According to the bankruptcy filing, the company owes the state more than $75,600 in sales taxes.
Non-priority claims include nearly $50,000 owed on four credit cards and $3,000 to China Town Market in Madison Heights for supplies.
Additionally, Kin Cheung Yue, a 13.33 percent shareholder in the company, made a personal loan of $40,000 to the company that has not been repaid.
The Great Lake Chinese Seafood Restaurant operated for 19 years at Carpenter Road near Packard Road.
According to Pittsfield Township records, the restaurant's building at 2910 Carpenter Road was sold by Kwock Gee to New Win Property Management LLC in 2004 for $750,000. According to state documentation, Kwok Cheung Tam also is the registered agent for New Win Property Management.
The property's estimated market value is $781,200.
The next scheduled action for the case is a meeting of creditors to be held in Ann Arbor July 24.
Ben Freed covers business for AnnArbor.com. You can sign up here to receive Business Review updates every week. Get in touch with Ben at 734-623-2528 or email him at benfreed@annarbor.com. Follow him on twitter @BFreedinA2
Comments
PineyWoodsGuy
Mon, Jun 24, 2013 : 10:01 p.m.
@johnnya2. I've heard divorce lawyers advise the same thing. File for divorced, sign a property settlement agreement that gives all property to the wife. Get divorced. Then ex-husband files for bankruptcy. The divorced couple can still live together while the legal drama plays-out, even re-marry if they're in love . . . I think the lawyers call this "estate planning." Any lawyers out there: Correct me if I'm wrong . . .
johnnya2
Mon, Jun 24, 2013 : 6:06 p.m.
Let's face reality. They broke the real estate and the restaurant into two companies to protect themselves and get out of paying their bills. Sell the property and pay the debts. They could sell it for $500k and STILL have money left to get out from all their bills and not declare BK. THIS is everything that is wrong with corporate law in the US.
Brad Pritts
Tue, Jun 25, 2013 : 3:45 a.m.
I am not a lawyer in real life, or even on TV. But as I understand it, people can set up separate corporations or trusts to protect their assets. If you have done so, then you can't offer those assets as collateral for a loan, etc. On the other hand, if you make these moves just ahead of financial trouble, the courts will frown on that and may (as they say) "pierce the corporate veil". Of course, if you are a big enough supporter of the currently ruling political party you may get a free pass.
PersonX
Mon, Jun 24, 2013 : 3:56 p.m.
This is so terrible--all these hard working people defrauded; the bankruptcy should be denied if that is possible, and the law should pursue everyone involved in this fraud, confiscate their assets and repay those who are owed money. It was the best Chinese restaurant in the whole are and the staff was always wonderful over the years. This is very sad.
Jay Thomas
Mon, Jun 24, 2013 : 3:25 p.m.
So there would have been $275k in assets vs $230k in debts if he hadn't taken the money out. Looks like he intended to run up the credit cards before this (the real reason we have 27% interest rates on those things). He developed the "New Win System" so he couldn't lose... I'll be curious to see what the .gov does to get its money back (considering he has it).
Ben Freed
Mon, Jun 24, 2013 : 3:53 p.m.
Jay, Your numbers are certainly correct, however it was unlikely that Yue was "running up" the credit cards himself. The co-debtor on the credit cards was Kwok Cheung Tam, the registered agent, and not Kin Kwok Yue. Yue is a co-debtor on a loan from Rapid Financial Services worth $18,000. It is also unclear that he has the money (or any money). It will be difficult to determine until the restaurant's books are examined.
mady
Mon, Jun 24, 2013 : 3:10 p.m.
My sympathies to the employees who were defrauded. Management gets in over its head and then when the workers start expecting to be paid for their efforts, they file for bankruptcy. these people are morally bankrupt as well. disgusting!
Elijah Shalis
Mon, Jun 24, 2013 : 2:03 p.m.
Lai Lai down the road is better, guess their fortune wasn't that good.
seldon
Mon, Jun 24, 2013 : 2:10 p.m.
Wow, do I disagree. Lai Lai is a very distant second to what Great Lake could do.
seldon
Mon, Jun 24, 2013 : 12:22 p.m.
I miss Great Lake already. I'd love to see them come back in some form, with the same menu and recipes.
DonBee
Mon, Jun 24, 2013 : 12:04 p.m.
What is an: "or attorney attorney Ryan Moldovan" Is it someone who is the attorney for an attorney on the case?
seldon
Mon, Jun 24, 2013 : 2:07 p.m.
Hey bro, I heard you liked attorneys, so I got you an attorney for your attorney...
Ben Freed
Mon, Jun 24, 2013 : 12:46 p.m.
Thanks for the catch DonBee, we've fixed that redundancy.
Arieswoman
Mon, Jun 24, 2013 : 10:37 a.m.
They had good food. Too bad about this happening.
Paula Gardner
Mon, Jun 24, 2013 : 10:29 a.m.
It was open at that location for 19 years, according to the story about it closing that we published in May. http://www.annarbor.com/business-review/great-lake-chinese-seafood-restaurant-on-carpenter-road-closed/
Ms1215919
Mon, Jun 24, 2013 : 2:53 p.m.
....lol.....why is the May 20th article about the closing re-posted on the A2.com Home page today? Sh-sh-sh-aaaaaark!
WalkingJoe
Mon, Jun 24, 2013 : 1:55 p.m.
@Craig Lounsbury, don't you know it's more fun to point out other's mistakes than to recognize your own.
Craig Lounsbury
Mon, Jun 24, 2013 : 1:16 p.m.
I don't have to tell you guys posting a story in here is like swimming in shark infested waters, if you bleed they will find you.
Ben Freed
Mon, Jun 24, 2013 : 12:45 p.m.
The article has been changed to state specifically that the restaurant had been at the location for 19 years. Ben
LAEL
Mon, Jun 24, 2013 : 10:52 a.m.
Can this article say that? "Several years" makes it sound like it's only been open for three or so years. sev·er·al [sev-er-uhl, sev-ruhl] adjective 1. being more than two but fewer than many in number or kind: several ways of doing it.
steve salant
Mon, Jun 24, 2013 : 10:21 a.m.
Kinda vague to report "The Great Lake Chinese Seafood Restaurant operated for several years at Carpenter Road near Packard Road." Is it too much to ask that the journalist report exactly how long the restaurant had occupied that location? It exceeded two decades.