BARNEYS SEEKS AUDIT OF BOOKS FROM MAD. 61
NEW YORK — Barneys Inc. wants bankruptcy court permission to hire an accounting firm to audit the books of Mad.61, the former restaurant that operated in Barneys on Madison Avenue until last August.
As reported, Barneys claims Circle Management, which managed Mad.61, failed to deposit certain cash receipts and that Circle’s owner, restaurateur Pino Luongo, may have used advances from Barneys for his other restaurants.
Circle claimed Barneys withheld payments owed under its operating agreement, causing an overdraft on Circle’s bank account. Barneys opened a new restaurant with different management on Sept. 30 called Fred’s.
According to court papers, the accounting firm Citrin Cooperman & Co. will analyze Barneys’ funding to Mad.61 from Sept. 13, 1993, through Aug. 22, 1996, and audit the books and records. It will also analyze the restaurant’s cash flow and transactions within Luongo’s companies. Circle has claimed that Barneys owes it $507,000 for taxes, third-party vendor bills and tips for employees.
Barneys, in bankruptcy since January 1996, seeks to extend to Sept. 2 its exclusivity period, which it also needs to renegotiate its $100 million debtor-in-possession facility with Chase Manhattan Bank, which expires in August. Barneys has also said it expects to reach by May 28 a deal with a purchaser to fund a reorganization.