By On the occasion of our 20th anniversary
By Gustavo Arellano
By R. Scott Moxley
By Alfonso Delgado
By Courtney Hamilton
By Joel Beers
By Peter Maguire
By Charles Lam
That’s when things got especially troublesome for Darvish. He pulls up another document on his (well-organized) computer, showing the account ledger of all of Mor Project’s payouts for Irezumi out of a Wells Fargo bank account. “I requested copies of all documents, but they only gave me partials,” he explains, scrolling through the provided six pages out of a total of 41.
Darvish points out several transfers from company 52, Irezumi, to company 55, Blanca. Darvish says he wired his last investment installment of $40,000 on April 7. As his complaint states, that very same day, funds were transferred from the Irezumi account to Blanca’s in the amounts of $7,500, $1,200 and $6,500. On May 27, an additional $4,500 was transferred.
Garbutt, a commercial-real-estate broker, denies the allegation of commingling. “Eighty percent of the money was mine. And some of it were loans made to the company. The amount of money invested by investors—it wasn’t very much money—was 100 percent spent on the businesses,” he explains. “Any claim of commingling funds would be my money, and I don’t agree with that. . . . If I own two businesses, and money was going back and forth, that’s not commingling, that’s my money.”
When told of Garbutt’s statement, Darvish responds that none of that was ever disclosed to him. “His money was an investor, and my money was an investor, also. Throughout this document,” he says as he thumps on the thick Irezumi investor booklet, “there’s nowhere anywhere anything indicating to me that there will be money lent to Irezumi. It just talks about investors. The thing is, even if it was lent, why was it pulled out to a point where they couldn’t pay contractors and they couldn’t pay employees?”
Posniak responds that the funds were being transferred from two separate accounts under Irezumi—a general account and a payroll account.
He admits that Irezumi was underfunded from the very beginning. “It was underfunded because of the capital markets and the banks. A portion of our funding was through equipment leases. That was part of our plan,” he says. “We signed the Irezumi lease in the middle of April 2007. We were committed; we were funded. We had already engaged and moved forward. So when you’re $350,000 into your process, you can’t just throw in the towel. You need to get it open and try to refinance it yourself.”
* * *
Blanca opened April 25, 2008, to exceptional reviews of its unique, coastal-themed Spanish-Italian cuisine. Its location is gorgeous: two dining rooms connected by an outdoor patio facing Newport Harbor’s twinkling lights, luxurious yachts and even the occasional booze cruise drifting by.
The restaurant was especially noted for its highlight of crudo, a delicate raw fish finished with such seasonings as sea salt, olive oil and lemon juice.
“We opened this restaurant, you know, molecular gastronomy, and it was amazing,” Posniak says. He indicates around him while seated at that table alongside the harbor. “Nick Weber was probably one of the best chefs I’ve ever worked with. The problem was, when you open a restaurant, you have a honeymoon period—you’re the cool new restaurant. We had that. But what’s eventually going to happen is that honeymoon period dissipates.”
So business began to taper off. And it wasn’t long after that the gossip mill relayed that, just like at Irezumi, employees weren’t getting paid at Blanca, either. Numerous anonymous sources confirm that the Mor Project’s former circle of employees were also not receiving their allotted salaries. The money they were owed swelled, as did frustrations.
“Anton kept telling everybody, ‘Oh, money’s coming in two weeks, we have $500,000 in two weeks, we have an investor . . . everything! Two weeks. Meanwhile, we haven’t been paid in six weeks, eight weeks, 10 weeks—we’re broke. None of us can live,” one former employee claims.
Jeffrey Grasso, 39, has been the general manager of Blanca for five months. “We were busy for a couple of months, but it was never a reassuring thing on a daily basis. We have a high check average, and not everybody in this economy can afford that,” Grasso says. “You can come out once in a while or for special occasions, but we’ve got vendors to pay, labor to pay—all that compiled as the restaurant slowly was getting a name.
“In my 23 years of experience, I’ve never experienced so many good food reviews. Nick Weber, incredible. Hands down to that man.” Grasso holds his palms up. “But one man, our food, our location is not enough for the public to know where we’re at.”
Less than 25 percent of the original staff remains at the eight-month-old Blanca—and Weber was among the casualties.
Both Posniak and Grasso confirm that employees went unpaid. Former employees say that, at one point, fliers were even passed around Lido Village, where Blanca is located, by an unknown person bringing into question the business ethics of the restaurant.
“Absolutely, they’re not [getting paid]. And that’s what happens when you have a restaurant that fails. Employees, vendors, landlords don’t get paid. You’ve got a business, and when you got no more money to put in, restaurants fail. When that happens, all you can do is try to mitigate and try to get everyone taken care of,” Posniak says.