Troubles (and Lawsuits) Keep Coming for Bailey's American Grille in Seabrook
After news broke last week that Brad Bailey, a Nassau Bay councilman in addition to the owner of Bailey's American Grille in Seabrook, had suddenly closed his popular restaurant and banquet hall, Bailey quickly ran into more trouble after failing to show up for a deposition in one of several civil suits that have been brought against him in the wake of the restaurant's closure.
Bailey's American Grille: As far as we know, the banana-pudding recipe is not under litigation.
Bailey and his wife Julie were scheduled for depositions September 17, according to Ben Westcott, an attorney representing Fisher Commercial Construction, which is suing the Baileys for flaking on $167,000 in payments for work done on their Houston home. The Baileys have said the work was never completed.
"My clients have always been willing to come back and address any of his concerns, but we're not going to do it without getting paid," Westcott told us.
Fisher Commercial Construction's suit -- filed in February -- has been consolidated with suits filed by two companies Fisher sub-contracted with. According to one of the sub-contractors, Aqueduct Plumbing, the Baileys ordered Fisher to serve Aqueduct and Green Leaf Contracting with "Stop Work" notifications that "explained the Baileys were unable to pay for the valuable services and materials that had already been provided...."
Aqueduct's suit also alleged that the Baileys hired the company for work on Bailey's American Grille, the restaurant Bailey recently closed. "Based upon information and belief," the suit states, "Bailey's American Grille is struggling to make a profit and, despite the Baileys' knowledge of their restaurant's financial difficulties, the Baileys represented to Aqueduct that the Baileys and Bailey's American Grille were willing to pay, had the ability to pay, and intended to pay...."
(We should point out that Bailey's American Grille has two arms; one is the restaurant, the other is a banquet facility. San Antonio National Bank foreclosed on the banquet hall in January and had sent notices of intent to foreclose around August 2009).
Bailey's American Grille is also the subject of a suit filed by investors Alan and Michele Jacobs, accusing Bailey and his wife Julie of dipping into restaurant funds for personal use. The suit also names Bailey Family Restaurant Group patriarch Paul Bailey, Julie Bailey, and Brad Bailey's brother and sister--in-law. Confusingly, the suit also lists "Sudie's Management Company #3," doing business as Bailey's American Grille. (Paul Bailey runs the popular Sudie's catfish restaurants, so we're not sure why Bailey's American Grille's legal name is Sudie's Management).
According to the suit, the Baileys "treat the entities they own and control as their personal piggy-banks, pulling money out of each of the entities to suit their personal financial needs or the needs of their other businesses. While this improper behavior may have been tolerated when the businesses were wholly owned and operated by members of the Bailey family, these businesses now have outside investors whose interests are being harmed each time the Bailey's withdraw from the 'family ATM.'"
The suit accuses Brad and/or Julie Bailey of, among other things: paying Sudie's Management over $200,000, with checks drawn on Bailey's American Grille's account; cashing more than $40,000 in checks for "petty cash"; and paying a Mercedes-Benz dealer $1,135 with restaurant money. It also accuses Brad Bailey of writing $44,300 in checks to himself out of the restaurant's account. (Sources familiar with the restaurant's closing say that Bailey stripped the place of expensive light fixtures, carpet, and interior doors).
Adam Pogach, one of the attorneys representing the Jacobs, said that, even as the business appeared to be sinking, Bailey would always report positive financial projections. "Every few months, he would come out with a new one and it would be that much more grand," Pogach said. According to the suit, Bailey hasn't honored the Jacobs' requests to see the restaurant's books.
Bailey told us last week that the restaurant's closing had nothing to do with the lawsuits. While ultimately saying he was responsible for the business's problems, he said "My mistake was for reopening it after the flood" caused by Hurricane Ike. He also blamed the struggling economy, the Obama administration's slashing of NASA, and a "power move" by his electric company all contributed to the problem.
We're not sure how he was going to be able to open a new restaurant under such conditions; nor are we sure why none of this came up in a blowjob Houston Business Journal piece from February 2009, five months after Hurricane Ike.
The story explains how Brad Bailey joined his father's restaurant empire after leaving his job at Houston-based Allied Home Mortgage, a company with a record of state sanctions and federal complaints.
According to the HBJ story, Paul Bailey wanted Brad to come up with a "thought-out business plan" before he struck out on his own: "Brad Bailey jokes that he had to get eye surgery after crunching numbers and staring at a computer screen for two months...." (But we wonder what was actually on that computer screen; how could a business plan approved by such an impresario as Paul Bailey turn into such a clusterfuck?)
While the defendants have denied the claims, the lawsuits -- and complaints from former employees who say they still are owed money -- have allowed an in-depth look into the Bailey clan's seeming success in the restaurant industry. Despite the aforementioned suits, and despite the fact that restaurant supply company Sysco won a $200,000 judgment against Bailey's American Grille in 2009, the Bailey name has been gold in the Clear Lake area. A new venture that Brad Bailey was supposed to start with Kemah Mayor Matt Wiggins was featured in the Clear Lake Area Chamber of Commerce's September newsletter.
The chamber was "proud to showcase Bailey's on the Bay, the refreshingly new banquet facility brought to you by Bailey's American Grille."
Why a venture to be owned in part by a guy with such a murky track record was something to be held up as an examplar of civic pride was something that struck us as odd, so we asked the Chamber's Stephanie Rice what being a member of the Clear Lake Area Chamber of Commerce means. And, as it turns out, it pretty much means that you pay membership dues.
She said the Chamber has a three-pronged mission, with two of those prongs being business development and educational excellence. We found that second prong especially interesting, seeing as how the Clear Creek Independent School District is suing Brad Bailey for back taxes. What you have then is a business owner who just cost employees their jobs while allegedly not paying the entity that collects money for public education. So we're not entirely sure what Brad Bailey is doing to help the Chamber with its mission.
Rice was extremely suspicious of our line of questioning; when we said we were just trying to inform people what the Chamber does, she asked if we'd be interested in writing about the organization's October hot air balloon event. We said we would, on the condition that she tell our readers how to sneak in without paying the $10 cover, as some people are special and shouldn't have to pay for things. That didn't work out well.
What else didn't work out well was getting a return call from Kemah Mayor Matt Wiggins, who was to be Bailey's partner in Bailey's on the Bay.
KPRC reported last week that Bailey has dropped those plans, but we haven't been able to confirm that with Bailey or Wiggins. We were told by someone who answered the phone at the Wiggins-owned Captain's Quarters B&B that we'd have a higher chance of getting a return phone call if we told her why we were calling.
We told her we'd take our chances, but now we're kicking ourselves because we should've said he won the National Publisher's Clearinghouse sweepstakes. Maybe then a sitting mayor would be more likely to call back and explain to the public about why he was opening a business with another sitting city official facing a heap of lawsuits indicating a pattern of breaching contracts.