Hawk ‘n’ Dove Heads to Bankruptcy Court

The owner of popular Capitol Hill eating spots like Hawk ‘n’ Dove, Senart’s Oyster House and The Chesapeake Room heads to court today for its first bankruptcy appearance.

The restaurant operator has a 2 p.m. hearing in front of Bankruptcy Judge S. Martin Teel Jr., where it will ask for permission to continue paying its roughly 200 workers while the company figures out a survival plan.

Baltimore-based Barrack’s Row Entertainment filed for Chapter 11 protection in U.S. Bankruptcy Court in Washington D.C., on Friday to dodge an April 1 payment that was owed to investors, including D.C. restaurateur Xavier Cervera, who sold the restaurants last year.

Mr. Cervera spearheaded renovations at the Capitol Hill intern-watering hole Hawk ‘n’ Dove which, once reopened with a fancy new menu, left some patrons longing for cheap beer. The other restaurants that filed for bankruptcy are Park Tavern, Boxcar Tavern, Lola’s Barracks Bar & Grill, Molly Malone’s, Pacifico Cantina and the yet-to-be opened Willie’s Brew and ‘Que, a barbeque-themed sports bar.

Mr. Cervera’s brother, Richard, returned on March 10 to lead the restaurant’s holding company.

Xavier Cervera and other investors sold the company to a new investment group associated with a Boston private equity firm, according to the blog Capitol Hill Corner.

But under that deal, they didn’t collect all of the sale proceeds right away. Instead, they agreed to be paid over time. The next payment to Xavier Cevera and other sellers came due on April 1. It’s unclear why the buyers changed their minds about paying the sellers the full amount.

According to court  papers: “The [restaurant companies] filed these bankruptcy cases because a payment was coming due on seller secured take-back financing that needs to be assessed for its validity and its terms need to be extended.”

That’s legalese for we need to talk to our creditors.

The Chapter 11 filing puts the brakes on moves by lenders and other creditors to seize assets when a company skips a payment.

The parent company appears to owe an undisclosed amount of money to two major groups: the investors that sold the business and the investors that bought it.

Mr. Xavier told other publications that the transformations at Hawk ‘n’ Dove and other restaurants were paid for largely by himself and a silent business partner from Florida. A Washington Post article didn’t name the silent partner, but court papers name at least one person with Florida ties who’s owed money: William A. Sport of Cutler Bay, Fla.

Another person who claims to be owed money, and who signed off on the bankruptcy petition, is William “Bill” Nimmo. Mr. Nimmo, reached by phone via the Boston private equity firm Halpern, Denny & Co. declined to speak with WSJ.

Halpern, Denny & Co. isn’t registered with the U.S. Securities and Exchange Commission as a registered investment adviser, which likely means it manages less than $150 million in capital. The last major batch of money it raised—$355 million—was in 2000.

-Michael Wursthorn contributed to this article.

Write to Katy Stech at [email protected]. Follow her on Twitter at @KatyStech.