With a Stick, Inc., doing business as Cocktail, a once popular gay nightclub on the southeast corner of Roscoe and Halsted in Chicago, has filed for Chapter 11 bankruptcy protection. The electronic petition was quietly filed Sunday in the Illinois Northern Bankruptcy Court.
Cocktail, and its owner John "Geno" Zaharakis, has been embroiled in financial problems and subsequent litigation since March of 2011. The lawsuits allege tens of thousands of dollars in delinquent rents, monies owed to former employees and other defaulted payments.
The Chapter 11 filing, if allowed to proceed by the court, could keep creditors at bay for at least 120 days while a plan of reorganization is filed. This will allow the business to continue to operate under current ownership and management. The court; however, may also appoint a trustee to take over operations. Creditors can also push for a conversion of the case to Chapter 7, or liquidation.
Cocktail has been closed two different times in the last year due to temporary license revocations related to unpaid taxes. It most recently re-opened February 10, 2012.
Jacob Meister, an attorney for Cocktail, said this is a positive move which will allow Cocktail to regroup and remain in business for many years to come.