The and six other Marra Restaurant Group holdings will be sold, but owner Steve Marra will continue to manage the restaurants, and the business will stay in the family.
Steve Marra’s brother, Mike, and his father, also Mike, were awarded the right to buy the business at a hearing at Kent County Superior Court on Tuesday.
“We are a tight family and we work together in business often,” said Mike Marra, Steve’s brother, in an interview Wednesday. “My entire family came to bat behind Steve.”
Father and son will own the properties, but Steve Marra will continue to run the business, said Mike.
“He’s going to run the whole thing,” said Mike Marra. “He’s basically going to have my father and myself to bounce things off of but he’s going to be in charge.”
“Everything that’s open is staying open,” he said. Savage on Main Street in early January and Marra said there are no plans to reopen it any time soon.
“The family owns the building,” he said about the Post Office Café. “Obviously, we’ve had a lot on our plate the last two months. Now we have some time to breath and make some decisions.”
The Marra Restaurant Group went into in December. Receivership is a form of bankruptcy where a company can avoid liquidation by reorganizing with the help of a court-appointed “receiver” or trustee. The receiver, John Savage, put the in January.
On Tuesday, Savage recommended a bid by KBN Group Inc., a company incorporated in January and owned by the two Marras. The only other bid was for a single Marra property.
“It is the only offer for all the businesses,” Savage told Superior Court Judge Allen Rubin on Tuesday. “It’s the best offer.”
Judge Rubine approved the sale only after former partner Bill Pinelli agreed to drop against Steve Marra. In an agreement negotiated just before the hearing convened, Pinelli said he would drop the lawsuit and Marra agreed to resume payments stemming from his buyout of Pinelli in 2010.
Pinellli had accused Marra of stealing more than $1 million from their jointly-owned business between 2000 and 2005. He based his accusation on an affidavit signed by a former employee who said that Marra had directed her to divert money illegally.
“It appears that the monies alleged in the affidavit were used to pay employees,” Pinelli lawyer Michael Kelly told Judge Rubine. “Those monies were not in fact taken by any other shareholders but were used to pay employees.”
The affidavit had been signed by Kim Ragosta, who had managed one of the Pinelli-Marra restaurants during those years. Ragosta now manages Pinelli’s Deli and Café in West Warwick, which is owned by Bill Pinelli.
“What Mr. Pinelli and Mrs. Ragosta told their attorney – I knew the truth and I knew I’d have my day in court,” said Steve Marra after the hearing on Tuesday. “There was no embezzlement, fraud or anything else done on my behalf.”
Steve Marra said he was glad that the sale had been approved. “It’s been difficult on business. I hope that our customers will return in droves to support us.”
The restaurant group still faces a class-action lawsuit, the result of sending thousands of unsolicited faxes. According to the lawyer representing the plaintiffs in that case, a company’s insurer typically negotiates some kind of settlement and that this particular case is not near resolution.
Correction: As a result of the receivership, according to Savage's spokesman, the class-action lawsuit against Marra Restaurant Group does not apply to the new owners.