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Upper Crust files for Chapter 11 bankruptcy protection

Per a Boston Globe story this morning. I feel for its workers, and hope a place as good as Otto eventually takes over every Upper Crust location, but it's hard not to wish failure on the utter assholes that are its owners.

http://mcslimjb.blogspot.com/

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  1. "were" its owners.

    1. Or a place as good as Muqueca.

      1. I'm thinking you don't own a business with employees. No one who does, rejoices when another business hits hard times.

        30 Replies
        1. re: libertywharf

          And you sound like someone who has never eked out a living as a restaurant employee.

          Further, "hitting hard times" doesn't remotely describe what's going on here. The entire industry has gone through difficulties in the downturn; Upper Crust's problems are due to its owners' criminal behavior.

          As I've said here and elsewhere many times, I empathize with the workers, but I can't support a business run by such exploitative, abusive owners. It looks to me like ethical businesspeople with a superior product are stepping briskly into the closed UC locations: see Otto's recent expansion in Boston.

          You are welcome to spend your dining-out dollars as you see fit, of course.

          http://mcslimjb.blogspot.com/

          1. re: MC Slim JB

            Any truth to the rumor that Jordan et. al. stole all of their recipes from (the far superior) Sweet Tomatoes Pizza in Newton Centre? They're very similar thin crust pies, but Sweet Tomatoes is way more consistent in quality. I've never really understood the Upper Crust hype.

            1. re: calvnhobs6

              Yes, the "Jordan Tobins, business plan / recipe thief" allegation was outlined in this Globe story: http://www.boston.com/business/articl...

              Not only did he allegedly steal their recipe (a tough claim to prove once you've made some tiny adjustment or two), but also opened his first UC store in a location Sweet Tomatoes had been eyeing for expansion. In retrospect, he looks like a scumbag from Day One.

              http://mcslimjb.blogspot.com/

              1. re: MC Slim JB

                Wow, that article doesn't leave too much room for doubt.

                1. re: MC Slim JB

                  Interesting article.

                  i was aware of some of the content. In the "small world" dept,I've known Hedy of Sweet Tomatos since she was an infant. Ms 9 and I are friends and neighbors of her parents. Really dedicated and hard working woman who has worked hard for her success.

                  I have to give more credibility to her version of events.

              2. re: MC Slim JB

                Slim.. I agree and whether or not someone owns a business is irrelevant in their opinion of Upper Crust. I feel bad for the employees who may be affected..but in no way shape or form do I feel one iota of sympathy for the owners. They made their bed. Their bad behavior has been going on for years. Their business practices are something that any other reputable business owner would find intolerable..starting with the hiring and exploitation of illegal immigrants. No reputable business owner should defend that. I guess they fell on hard times once they had to actually pay their workers legally...you know..like their competition does?
                Added to that..their pizza isn't all that good.
                That being said..I wonder if this Chapt. 11 declaration is a way to get around the numerous unresolved court cases they have.

                1. re: BlueMagic

                  I'm no lawyer, but I don't think Chapter 11 protects you from criminal sanctions, just gives you room to maneuver while you make arrangements to pay existing creditors. There's a queue for who gets paid, too: the tax man is almost always first in line, and one of their big debts is to the Commonwealth.

                  http://mcslimjb.blogspot.com/

                  1. re: MC Slim JB

                    The other issue could be that a lot of small businesses are required by landlords to guarantee leases personally. So UC could reorganize but still leave the owners in a very bad spot. IF American Airlines/GM, etc declare bankruptcy, it'sunlikely that the top execs will be on the hook for anything. I'm not a lawyer either but I'm sure CH 11 doesn't protect you from criminal sanctions.

                    As faras their labor practices, I believe in "innocent until proven guilty." There's also the saying that where there's smoke, there's fire. However it shakes out, it just looks like andother sad biz story thar the only people may walk away with anything are the attorneys, liquidator or other entrepreneurs who may be able to buy restaurant equipment at pennnies on the $ (if they own it)

                    1. re: 9lives

                      I don't think there's much question of innocence on one score here: the US Department of Labor has issued two judgments against the Upper Crust for underpaying workers, one for $340K and another for $80K.

                      There is still an open MA attorney general investigation probing whether UC tried to recover the cost of these judgments by deducting money from the paychecks of the same workers it had underpaid previously; employees also have a class-action lawsuit pending on that issue. The whistleblower's suit is still pending, as far as I know, too.

                      http://mcslimjb.blogspot.com/

                      1. re: MC Slim JB

                        I stand corrected.

                        1. re: MC Slim JB

                          They could just do what a certain cambridge ice cream shop did and beg their customers to pay into a defense fund to pay off uncle sam.

                          1. re: jgg13

                            Fiscally irresponsible ice cream were then and are still a much beloved institution. Doubt people would pony up for these guys who have played every angle on ripping off their workers, franchisers, and government (besides being a non-noteworthy pizza producer in fancy clothes).

                            1. re: yarm

                              Sucker born every minute. Hordes of Phantom Phans have been told it's the best.

                      2. re: MC Slim JB

                        Okay..good point. True that it's difficult to avoid the tax man...! Geez..I guess there is no low that these guys won't sink to. They've taken advantage of just about everyone a business can take advantage of...so I guess we can just add their creditors to that list.

                      3. re: BlueMagic

                        Its a bit of slippery slope discussing who is more ethical and who is not particularly in the restaurant industry. So while individuals may decide that certain actions are worth a "boycott" (there were past offenders mentioned here like the Super88, Cafe Belo, etc which apparently didn't), I am not a fan of the group think "we should be boycotting UC..."

                        I really think we should be focusing the chowishness of an establishment.

                        In any case, some of their competition has been fined and sanctioned too.

                        http://www.dol.gov/whd/media/press/wh...

                        http://www.dol.gov/whd/media/press/No...

                        1. re: itaunas

                          What is "chowishness?"

                          1. re: FinnFPM

                            It's an attitude that reflects the Chowhound Manifesto, which is essentially about being dedicated to the pursuit of good food of every stripe purely for the love of it, sharing tips with like-minded obsessives, and remaining unswayed by flashy packaging, industry hype and the so-called wisdom of crowds: http://www.chow.com/manifesto

                            http://mcslimjb.blogspot.com/

                            1. re: FinnFPM

                              chowishness aka deliciousness (which is an awkward word) is a made up adjective used on this board (and others) for many years. Limster tends to be able to state such ideas without the crutch of those words so please seek out his thoughts rather than mine. However, the thought is we are a collective in search of delicious food, so we give our own knowledge, take advantage of the ideas of others whose tastes we trust, but are always searching for some new pleasing food experience. Thus chowishness is individual, it can be relevant to a location (best Chicago dog in Boston, East Bay style Johnny Cakes), and its something that can change with time (yes, chowhounds have food trends too).

                              My experience is there isn't much intersection with those words and Upper Crust. And while I have even been to the city in Brazil mentioned in the stories (if anyone wants to know a good cheese and snack shop out of town...) and share concern for exploited workers, I am not convinced that UC is among the worst as far as worker abuse. The system here has largely worked and those concerned with the workers could help much more via other avenues (volunteering to teach English, rights, even donations to non-profit organizations) than boycotting the one business that got caught. Usually when working with other cultures you gain some free chow too. So we aren't helping the chowhound effort or much the workers themselves, by debating the UC story and boycotts.

                            2. re: itaunas

                              Good point about the slippery slope in general. Obviously..I meant to compare UC's business practices with businesses who actually play by the rules. Businesses who don't play by the rules don't deserve to be defended.

                              As far as the "chowishness" ( btw love that term!) of Upper Crust..well..that's not difficult to comment on. Based on the taste and quality of their pizza..there are probably 30 places I would go when craving a slice before I would go to Upper Crust. Frankly..their pizza just isn't all that good. In Newburyport..it's easy enough to steer companions to Oregano's.

                              1. re: BlueMagic

                                But it WAS good in the original Charles Street location for the first year or two, and then something changed. Food Foreshadowing perhaps.

                                1. re: Bellachefa

                                  You are correct, it was better when they had just one and even two shops. But they expanded way too quickly to ensure that quality remained consistent. Even the original location became inconsistent, and the far flung locations just weren't good.

                                  I really liked the sauce (I realize a lot of people do not), and so have been wanting to try Sweet Tomatoes ever since that article JB cites first came out. But it's kind of out of the way.

                                  1. re: Alcachofa

                                    I have a Sweet Tomatoes just down the street, and it is very similar to UC. I'm not a huge fan of the tomato sauce at either place, but Sweet Tomatoes does have some great "fancy" pizzas, like one with yukon golds, fontina and truffle oil. They have good buff chix, too.

                                    1. re: nsenada

                                      They have an excellent shrimp pizza (red or white) as well.

                                    2. re: Alcachofa

                                      I've only eaten Sweet Tomatoes at the store once and really liked. As you could guess, they cater a lot of our building events...always a hit.

                                2. re: itaunas

                                  Upper Crust seems to have been egregious in its actions and worth mentioning on this board.

                                  1. re: cambridgedoctpr

                                    UC was more stupid than other offenders in their response after being caught and obviously did not follow or lacked advice of counsel. That is probably indicative of their overall business sense and I would expect a similar business outcome eventually, even w/o the court cases and bad press. However, there is nothing unusual in this story and I have seen much worse, but you can believe otherwise if you would like. Sanctions are good press and convenient for everyone involved. However, I think its worth discussing the larger "forest" of problems, but that is beyond the scope of the "chowhound" as its not chow (its a forest which has many pitfalls for both employee and in some cases employer). And I think we have lost sight of decent chow by focusing on trees which are also beyond the scope of chowhound in several recent discussions, in this case the tree is "I boycott UC in the name of workers rights, you should too." (Sorry, UC has already been fined multiple times and is probably pretty careful now, so immigrants working there are probably treated fairly well today and you aren't helping them. And its distracting attention from those who are being taken advantage of today).

                                    1. re: itaunas

                                      All excellent points, worth further discussion. Maybe if UC's owners hadn't ignored the sanctions for gross violations of the contract with their employees that they'd been caught dead to rights on, while they ran around flaunting private planes and yachts, we wouldn't be calling special attention to their sins versus the industry's sins in general. I think the egregiousness of their greed, hubris and folly is big part of what makes it noteworthy here.

                                      http://mcslimjb.blogspot.com/

                                      1. re: itaunas

                                        I think that trying to entirely remove the political from the act of -- sigh -- "chowing" is misguided. Food is political, and there's no getting around it. We need not constantly be focused on this fact, but anyone who tries to ignore it does so at his own peril. A lot of things happen before the food is on your plate. If we care how a food tastes, then we care about where it comes from; if we care about how it's made, then we care about who made it.

                                        1. re: FinnFPM

                                          Indeed, which is further demonstrated by the fact that the mods have permitted this discussion to go on this long.

                              2. re: libertywharf

                                I felt sorry for Madoff's secretaries....

                              3. good riddance to bad people who made bad pizza.

                                1. For better or worse, there's no mention of Upper Crust going out of business.

                                  13 Replies
                                  1. re: Blumie

                                    Also worth noting that we've seen no court resolution on some of the other outstanding actions against the company, like additional DoJ suits around ongoing abuse of workers and failure to pay settlements from previous judgments, the employee class-action lawsuit against the owners, and the death threat / wage withholding allegations against Tobins by an employee whistleblower. And there's the current internal fight between the other two owners and Tobins. Plenty of shoes left to drop here.

                                    http://mcslimjb.blogspot.com/

                                    1. re: MC Slim JB

                                      Exactly. Chapter 11 is reorganization, not liquidation. Important distinction.

                                      1. re: Msample

                                        there are liquidating 11's, too.

                                        1. re: eLizard

                                          Most 11 filings are reorganization plans, subject to lengthly court administration, creditor prioritization, debtor in posession agreements, modified loan covenants, and rejection or affirmation of individual operating leases, which basically allows the company to "keep" only the most profitable units, provided that a bankruptcy court will approve a plan moving forward for the re-structured entity.

                                          7 filings are the death knell of dissolution.

                                          1. re: Veggo

                                            i've worked in bankruptcy since 1998. it could still liquidate. i've not checked the docket. it might be a prepack re-org. they might do reorg down the road, too. i assume either way there will be dips and a cash collateral. but still could go to liquidation...... even with a confirmed plan. or they could file a liquidation plan.

                                            either way, their business practices were pretty reprehensible.

                                            1. re: eLizard

                                              You're still a pup. The human toll from the process is fatiguing after a few decades.

                                              1. re: Veggo

                                                thanks! i feel like the old lady. i used to work for a chapter 7 trustee, then did commercial 11s on debtor and creditor side. now very discreet work for the practice at the firm at work in now. mostly i do complex commercial litigation.

                                              2. re: eLizard

                                                The rule of thumb that we transactional lawyers follow is that anything can happen in a bankruptcy! The only point I was trying to make in my initial post on this topic is that just because they've filed for bankruptcy does not (necessarily) mean that they're going out of business. I would guess -- although I have not researched this -- that most Chapter 11 filings do not result in a liquidation, but rather result in at least an attempt by a reorganized business to make a go of it.

                                                (That said, in some industries, such as retail, Chapter 11s get converted to Chapter 7s fairly frequently, but that's because retail industry secured lenders would usually much prefer to liquidate the collateral than give the business another attempt to succeed. I don't know about the restaurant industry.)

                                                1. re: Blumie

                                                  Partly because retail "going out of business" sales have become a circus industry of its own. Used restaurant equipment has its own group of parasites, but often the real estate is the real prize. Great leases, locations, think Sears.

                                        2. re: MC Slim JB

                                          My guess, and this is only a guess, is that they'll present some sort of reorganization plan to the court that allows the current owners to maintain control. It'll probably include selling off some assets and closing some stores. That would in theory generate some cash and leave them with the most profitable pieces of their business. In the end, the creditors don't want to control this business, they just want to get paid. There would obviously be some financial convenants along the way, and if those got breached then the court would take a look at other solutions.

                                          1. re: MC Slim JB

                                            Death threats? Hadn't heard about that.

                                            1. re: nightsky

                                              The Globe's initial coverage of the death threat case: http://www.boston.com/business/ticker...

                                              Looks like the case is still moving along: http://pacer.mad.uscourts.gov/dc/cgi-... I'm no lawyer, but it looks like the suit has fallen down on the charge that UC stiffed the employee on his last paycheck because he didn't file a criminal complaint with the AG first before going forward with the civil suit. Otherwise, attempts by UC to have the other charges in the suit dismissed have failed.

                                              http://mcslimjb.blogspot.com/

                                          2. re: Blumie

                                            That's an important point for everyone to keep in mind. This is hardly the death knell for Upper Crust that many around here may or may not be hoping for.

                                            And there's certainly a very important distinction to make between the players involved here. Businesses aren't people; their net effects can be negative, and we should feel little remorse when we wish ill upon them. They're just legal entities, and these are the frictional problems we encounter in economies like ours. Innocent employees, though, deserve sympathy, and we'll do well to give them our sympathy. Joblessness is no fun.

                                            Here's to Upper Crust suffering, and also to encouraging a restaurant scene that will soak up its best employees.

                                          3. If the original owners will no longer be associated with Upper Crust (not clear, but I assume the creditors won't keep on management that drove the business into the groud) do we still have to not eat there? I don't love, but don't mind the pizza.

                                            1. With all the Groupons they've been offering over the past couple of years, it's no wonder!

                                              1. there's something about karma that seems to prove itself over and over.

                                                I loved UC when they first opened on Charles St. I often recommended it for a quick slice to tourists. The quality of the pie after a couple of years took a nose dive. And then the immigration scandal sealed the deal.

                                                I'd missed the backstory of his employment at another pizza joint. Of course there are two sides to every story, but in this case I have to think that Jordan reaps what he sowed. Unfortunately he is an opportunist and will likely bounce back just fine.

                                                1 Reply
                                                1. re: Bellachefa

                                                  Yes..karma is a funny thing isn't it?
                                                  I had their pizza a couple of times in Newburyport..but after the whole immigration scandal came to light..I never went back. There are too many better pizza places around to spend my money in support of people who lack ethics.

                                                2. Not upset, I found their pizza to be overpriced and underwhelming. Much preferred Comella's for a similar style slice!

                                                  1. I have little sympathy for the Upper Crust. The fact that they looked to hire Brazilian workers unfamiliar with employment laws is not how you run a business. They grew too fast, and they cut every corner to do it.

                                                    1. on a pizza related note, we ordered a lot of takeout from here at a place i worked. and so weird, i could eat like a dozen pieces and i would never get full.

                                                      1 Reply
                                                      1. re: eLizard

                                                        I like a good Neopolitan pizza, but most of the time my issue with pizza as a meal is that you're either still hungry after or way too full; there's not middle ground.

                                                      2. Did anyone see this? It came out the same day that the story hit. I guess their employees just assumed they'd get screwed over and all left at the same time. http://boston.craigslist.org/gbs/fbh/...

                                                        1. Not surprising, but most of the UC stores have abruptly shuttered their doors per the Globe.

                                                          "Upper Crust has abruptly closed most of its restaurants and it is unclear whether the bankrupt pizza chain will be permanently shut down.

                                                          The closures come days after a trustee was appointed to oversee the company, which filed for bankruptcy protection last month. Upper Crust officials at recent hearing in US Bankruptcy Court claimed the business was low on cash, and workers at several locations Tuesday said the restaurants were shuttered indefinitely."

                                                          http://www.boston.com/businessupdates

                                                          11 Replies
                                                          1. re: misscucina

                                                            "Upper Crust Upper Crust closed Monday night because it had just four days of supplies and only $14,000 in cash after company executives paid themselves a month’s salary in advance."

                                                            "Some of the restaurants, including those in Boston’s Fenway and South End neighborhoods, are routing orders to locations in Beacon Hill and Brookline, which are being run by company founder Jordan Tobins and are not part of the bankruptcy."

                                                            ...grabbing my popcorn...

                                                            1. re: Gabatta

                                                              Someone's probably going to be eating prison pizza in the not too distant future.

                                                              1. re: misscucina

                                                                Plundering a privately-held company and maneuvering to stiff creditors may seem immoral and despicable, and perhaps short-sighted for an otherwise successful business, but it can be done without a single criminal act and is usually perpetrated by those with pressing debts unrelated to the business. Many have learned how to enrich themselves through the bankruptcy process. Best example: The Donald, who bragged about it. Don't blame the man, blame the legal process that enables it.

                                                                1. re: Veggo

                                                                  You're conflating two different bankruptcy scenarios. I am quite confident someone's going to be criminally charged here. For starters, stiffing employees on wages is a crime. Stiffing the state on meal taxes is also a crime.

                                                                  1. re: misscucina

                                                                    They know that. They will slow- pay it within deadlines.

                                                                    1. re: Veggo

                                                                      Not sure how you're so confident of this, but perhaps. The problem, however, is that once in bankruptcy, you don't get to decide to pay yourself (or anyone else) first. The court decides that, so taking that "$14K is also a crime.

                                                                      1. re: misscucina

                                                                        A court appointed administrator has fiduciarty responsibilities. The day preceding that appointment is the wild, wild west. Unraveling mis-deeds is extremely cumbersome, time-consuming, and expensive, within our jurisprudence system.

                                                                        1. re: misscucina

                                                                          They will lose all they took in a preference claim.

                                                                          1. re: L2k

                                                                            If they can find it...

                                                                            1. re: Bob Dobalina

                                                                              They don't have to find it. The bankruptcy court sends a notice to anyone who got a preferential payment and tells them to send the money back. You ignore those notices at great fiscal risk.

                                                                              1. re: L2k

                                                                                i don't the the b ct sends preference demand letters. a complaint is filed as an adversary proceeding in b ct, and the plaintiff (creditors' committee/trustee) serves it on the defendant or its registered agent. usually after the committee or trustee sends a demand letter. i filed 100 ap avoidance actions the day before thanksgiving in worcester about 8 years ago. you have a year after the bankruptcy to file the law suits, and a preference is any payment made i think 90 days prior to the bankruptcy filing. i think it has to be in excess of $500. there are many defenses, though. contemporaneous exchange and new value, i believe. like i said it's been many years.

                                                            2. I heard they're looking for a cash infusion of upwards of $120k in order to keep the doors open. Personally, I wouldn't support them for the way they screwed over employees in order to buy planes, boats, and generally live a lavish lifestyle on the sweat of others. Seems like throwing good money away as long as the name remains the same.

                                                              6 Replies
                                                              1. re: okra

                                                                I think that move is called a Toscanini.

                                                                1. re: Bob Dobalina

                                                                  Temporary, court-approved loans to debtors-in-posession during Chapter 11 restructuring always have a priority claim on assets.

                                                                  1. re: Bob Dobalina

                                                                    I don't think Gus ever bought a plane, a boat, or had a lavish lifestyle. He owned a bike.

                                                                    1. re: Uncle Yabai

                                                                      That's true, Uncle. I was referring more to the "looking for a cash infusion" part. No, these guys are going to earn a completely separate moniker for the level of disrepute they have shown.

                                                                  2. re: okra

                                                                    Worth noting that their cash crunch hit after the owners opted to pay themselves a month's salary in advance.

                                                                    http://mcslimjb.blogspot.com/

                                                                    1. re: MC Slim JB

                                                                      Depending on the probate administrator, that act could be reversed and the funds disgorged. Sadly, there can be more chaos to be unraveled if the perpetrators are booted, thus they often continue to benefit.

                                                                  3. More evidence of their sleaze -

                                                                    http://www.boston.com/businessupdates...

                                                                    3 Replies
                                                                    1. re: Bob Dobalina

                                                                      What scum.

                                                                      http://mcslimjb.blogspot.com/

                                                                      1. re: Bob Dobalina

                                                                        WOW

                                                                        1. re: Bob Dobalina

                                                                          This story just keeps getting uglier and uglier

                                                                        2. Bottom line for me is there is still no pizza worth it beyond Peabody until you get to Portland, ME with a brief and well-earned nod to Flatbread's in Amesbury. Great idea those Upper Crust boyos had but greed, dishonest dealings and the need to get-rich-quicker got the best of them. We have see this story before. They will never be punished for their misdeeds.