Case Study (and YES, it’s a true story)

When it lost its lease and was forced to move to a new location, a local bar prepared and filed its own removal application with the State Liquor Authority.  The answer he provided in the application did not conform to the actual practices at the bar.  The bar owner was charged with seven Liquor Law violations (including failing to operate as disclosed in the application) that resulted in disciplinary action seeking revocation or cancellation of the liquor license.

The local bar decided to represent itself in the investigation, disciplinary action, and hearing where it was charged with purchasing alcohol from someone other than a wholesaler, letting alcohol be sold for at-home (off-premises) consumption when it was only an on-premises retail licensee, and that it let another business use its license (known as availing).

Result? The license was cancelled.  The licensee will not be able to operate its business or sell the business via a stock transfer, and its owners and managers won’t be eligible to hold a liquor license for two years.  Even after the two years, the principals will be hard pressed to obtain a liquor license in the future.  The Liquor Authority will also be suspect if family members or known business associates applying for future licenses where the principals may have an undisclosed direct or indirect interest (in other words, putting the license in someone else’s name won’t solve the problem).

Saving a few thousand dollars on attorney’s fees cause him to lose his license and business.  Now, there is little change to turn around the damage, experienced attorneys are unwilling to take the case.  His investment will be lost.  Worse yet, the property could be proscribed for 2 years so no other restaurant or bar could operate at that location.  My guess is that the Landlord did not hire an attorney to protect its interests either.

What would you do if you were this business owner and could turn the clock back?

Don’t make the same mistake.  Professional assistance can be the best investment you can make to save the business and your investment.

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