Popular restaurant files for bankruptcy
By PAUL JUDGE
NEWS STAFF REPORTER
Washington Street Station, a downtown Ann Arbor restaurant popular with the business crowd, has filed for reorganization under Chapter 11 of the U.S. Bankruptcy Code.
The restaurant, which opened in the spring of 1988, has seen a steady increase in business, and was voted most improved by Ann Arbor News readers in the annual restaurant poll, published in June.
But the restaurant ran out of money last year and got behind in its taxes, according to David Tims, who owns the restaurant with partner Tony Thompson.
Documents filed with U.S. bankruptcy trustees in Detroit show that Tims and Thompson’s partnership, Washington Street Station Inc., owes its creditors a total of $511,856, including $189,478 in city, state and federal taxes.
Unsecured creditors were notified in an Oct. 23 letter from the U.S. Department of Justice in Detroit that Washington Street Station has filed for reorganization.
Tims, who plans to keep Washington Street Station open while he negotiates with creditors, said the restaurant has revenues of $1.2 million for the last 12 months and is turning a profit.
“We have been unable to negotiate any kind of a deal with the tax authorities to defer our taxes or set up some kind of working conditions,” he said
A spokeswoman for the IRS in Detroit declined to elaborate on the government’s decision to collect back taxes owed by Washington Street Station, citing laws preventing disclosure of tax matters.
Tims blamed the situation partly on the insolvency and back taxes owed by Preston’s for Ribs, as the restaurant was known before being purchased last year by Tims and Thompson. Months after selling the business, the owners of Preston’s for Ribs filed for reorganization under Chapter 11 last December.