Chrome Lotus, the downtown Santa Rosa nightclub, is attempting to restructure its debt in U.S. Bankruptcy Court.
The club intends to stay open and repay its creditors, said Bill Cutting, who owns Chrome Lotus with business partner Gianni Messmer. The owners spent more money than they intended to remodel the club, which opened in February 2010 at the corner of Mendocino Avenue and Seventh Street.
"We were over budget building the place, and time just caught up to us," Cutting said. "And we didn't want to walk away from it."
Remodeling the club involved two bars and a showroom for live music.
The Chapter 11 bankruptcy filing by MKM Concessions, which operates Chrome Lotus, lists about $580,600 in liabilities. Nearly three quarters of the total debt comes from personal loans. The club also owes about $108,000 in state and federal taxes, according to the court petition.
"With the filing, I understand we have up to five years to pay off our back debt," Cutting said. "I think we can pay that off in less than five years. Everyone wants to get paid right at once, and there was no way we could do that."
The club attracts between 200 and 300 patrons per weekend and employs about 30 people, Cutting said. The venue recently remodeled and changed its musical lineup to focus on DJs. On nights when the club had both DJs and bands, patrons would dance to the DJs, but live bands didn't fare as well, Cutting said.
"A band would start up and people would start walking out," Cutting said. "It would be nice to do live music, but it's not what most people want."
Downtown Santa Rosa has been a challenging location for nightclubs. The former 505 club, which occupied the space now used by Chrome Lotus and Franco's Pizza, did not have a license to serve hard alcohol and survived less than a year.
Around the corner on Seventh Street, The Vine nightclub lasted about a year before it closed in 2010, and a club named Rapture opened in its place. Seven Ultralounge, which previously operated the space, lasted about two years but closed after it was linked to a nearby shooting.
Franco's Pizza, which shares the building with Chrome Lotus, is a separate business and is not included in the bankruptcy case.
The bankruptcy petition needs approval of a judge before it's finalized. If it is, Cutting said he is confident the company will emerge from bankruptcy, but it may take a couple of years.
"I used to think Chapter 11 was a bad word, and I found out it's not. A lot of people have done it," Cutting said. "How many times has Donald Trump done it, and look where he is?"
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