Defunct Zionsville bakery files for bankruptcy protection

The owner of a now-shuttered Zionsville bakery filed for bankruptcy last month and asked the court to stop a previous tenant from selling off property left behind when its storefront closed in January.

Kelly Evans’ Le Dolce Vita LLC moved into the former Eagle Creek Coffee Co. space on Zionsville’s brick Main Street last summer, taking over its lease and agreeing to pay $80,000 for equipment and other business property, according to a complaint filed in connection with the bankruptcy case.

But a loan Evans had lined up to cover the $10,000 down payment fell through, and Le Dolce Vita “experienced a series of financial issues” that caused it to fall behind on its obligations to the seller, an entity called Ten Main Street Coffee LLC.

Evans told IBJ she made the move from Oak Street to larger space at 10 S. Main St. because she wanted more space and a better location.

"I knew going in it was going to be a challenge," she said, and what little capital she had went to build out the space.

Ten Main says the initial $10,000—which was never paid—was the only “hard” payment Evans was obligated to make. The balance was contingent on Le Dolce Vita achieving specific sales levels, court filings show.

In December, Ten Main proposed that Le Dolce Vita take over its payments on a previous $10,000 loan used to buy a kitchen hood, among other items. Evans didn’t sign anything, but made three payments totaling about $1,072. Ten Main says Le Dolce Vita only made one lease payment in more than eight months at the location.

The parties agreed to terminate Le Dolce Vita’s sublease in January, but Evans planned to continue operating elsewhere. She told IBJ potential investors had expressed interest in helping help the business afloat.

The bakery’s lawsuit, filed March 3, says Le Dolce and Ten Main also agreed that none of the assets inside the building would be disposed of until they could settle an ongoing dispute over who owned what.

But in late February, Ten Main owner Susan Pratt held a “private sale” to liquidate furniture, equipment and other supplies that Evans maintains was hers. The proceeds of the sale: about $3,200.

The seller “asserted unauthorized possession and control” over the property, according to the complaint, which asked the court to order Ten Main Street and the landlord to turn over the remaining assets. The lawsuit also asked for compensation for the items that had been sold.

In its response to the complaint, Ten Main maintained that it held a lien on the coffee shop property, and it was entitled to dispose of it when Le Dolce Vita defaulted on the purchase agreement.

At a hearing last week, the parties agreed that Evans can retrieve and inventory any assets remaining in the space, providing a copy to Ten Main. Because of the pending bankruptcy case, Le Dolce Vita cannot dispose of any of the property.

Le Dolce Vita has less than $50,000 in assets and debt of $100,001-$500,000, according to its Chapter 11 filing. The company owes almost $23,000 in food-and-beverage, withholding and real estate taxes, $20,000 in trust taxes, and $124,500 in unsecured loans from individuals.

The debt listing also included two “disputed” debts: $10,600 to Burrus Properties LLC (which opened a Boone County collection case against the company in January), and $98,000 to Ten Main Street.

Evans doesn't expect the bankruptcy case to affect operations at her other business, Union Street Baking Co. in Westfield. That bakery, which opened last fall, is a separate business entity that's performing well, she said.

"The community support has been incredible," she said.