Twin Cities Restaurateur Vlahos Files for Ch. 7 Bankruptcy
Dean Vlahos—the founder of the Champps sports-bar chain and the higher-end Redstone American Grill chain—has filed for Chapter 7 bankruptcy protection.
In his voluntary bankruptcy petition, which was filed earlier this month, Vlahos listed $45,812 in assets and $11.8 million in liabilities.
According to the filing, Vlahos owes an estimated $7 million to Rochester-based Home Federal Savings Bank and nearly $240,000 in back taxes to the state and federal governments, but the size of claims by most creditors are described in the filing as “unknown.”
At the peak of his success in the restaurant industry, Vlahos drove luxury cars and had a 13,000-square-foot home in Deephaven and Florida properties worth more than $20 million, according to a report by theStar Tribune. He reportedly sold Champps in 1996 in a stock deal that was worth $22 million.
Today, Vlahos manages Minnetonka restaurant BLVD. His income from the position totals about $11,538 a month, according to the bankruptcy filing.
Vlahos’ friendship and investments with convicted Ponzi schemer Tom Petters largely contributed to his current financial state, theStar Tribunereported. Vlahos reportedly invested $16 million with Petters, and he also gave Petters a $10 million loan prior to the collapse of the $3.65 billion Ponzi scheme.
During Petters’ 2009 trial, Vlahos testified that he was unaware that Petters’ operation was a fraud, the Minneapolis newspaper reported. Earlier this month, the U.S. Supreme Court rejected Petters’ petition for the court to review his conviction and 50-year prison sentence.
Vlahos and his ex-wife are reportedly the targets of a clawback lawsuit filed by Doug Kelley, the bankruptcy trustee charged with obtaining “false profits” from Petters’ investors. Kelley is seeking $39 million from Vlahos, according to the Star Tribune.
Through his attorney, Vlahos declined to comment on his bankruptcy when contacted by the Minneapolis newspaper. To learn more about Vlahos’ bankruptcy and his association with Petters, read the full Star Tribune story here.