Peerce's Plantation filed for Chapter 11 bankruptcy protection yesterday, hours before a scheduled foreclosure auction that would have added it to the list of area restaurants to have closed in the last few months.
The restaurant's lawyer said he anticipates that the court will allow the 62-year-old picturesque restaurant to continue operating while undergoing reorganization.
"To employees and customers it is business as usual," said Lawrence Yumkas, partner with Rosenberg, Proutt, Funk & Greenberg LLP of Baltimore.
Peerce's Plantation, on Dulaney Valley Road in Phoenix, boasts a view of Loch Raven Reservoir and country ambience. It is well-known by many Baltimoreans who remember the proms, weddings and anniversaries celebrated over a bowl of lobster bisque or a plate of "Peerce's Original" smoked salmon.
"Many of the celebratory events that have happened in Baltimore have happened at Peerce's," said Brian Boston, owner and managing partner of the Milton Inn and former corporate chef at Peerce's. "It's definitely one of a kind."
First Mariner Bank, which holds the mortgage on the restaurant's 2.1-acre property and an adjoining 14.7-acre parcel belonging to restaurant owner Peerce Lake, filed a foreclosure lawsuit on the properties Sept. 21.
John Wise, substitute trustee and First Mariner attorney with Thomas & Libowitz PA of Baltimore, said Lake and the restaurant were behind in payments. As of Sept. 15, First Mariner was owed $976,338.05, more than $11,000 of which was late fees, according to court documents.
Yumkas said the bank decided it no longer wanted Peerce's business.
"It's true there haven't been payments since August, because they wouldn't accept them," Yumkas said. "Now that [Lake] is certain First Mariner doesn't want to work with him, he has been looking for other financing, but just ran out of time."
While foreclosure has been halted for now, Wise said that "at a later point there could be a foreclosure."
"It depends on how the business does," he said. "We hope [Lake] can fix whatever is wrong with the business and satisfy his creditors, including First Mariner Bank."
In the bankruptcy petition, Peerce's Plantation Inc. listed assets of $2 million with debts of more than $1.6 million.
A list of creditors has not been filed.
Lake, 57, who took over the restaurant from his parents 34 years ago, filed Thursday for individual bankruptcy protection under Chapter 11 stop the auction of the adjoining parcel of cornfields.
He listed assets of less than $50,000 and debts of $50,000 to $100,000 on the bankruptcy petition, with the largest debt of $56,000 owed to Farmers Bank of Annapolis.
The trouble at Peerce's highlights the continuing struggle of older Baltimore area restaurants to survive intense competition.
In slightly more than a month, several venerable restaurants -- including Haussner's in Highlandtown, Gettier's (formerly the Orchard Inn) in Towson and Busch's Chesapeake Inn near Annapolis -- have gone out of business.
Restaurant consultant Diane Ffer Neas of Ffer & Associates Inc. of Kingsville, who had her wedding rehearsal dinner at Peerce's 15 years ago, said the restaurant has struggled over the years to keep up with the marketplace, both in physical renovation and menu options.
"I think for a long time it was one of the premiere places," Neas said. "When people were eating heavier foods -- not so cautious about fats and meats -- it held its own. But now, when people think of places to go, they don't think of Peerce's."
Lake's parents founded Peerce's in 1937 as a family restaurant with such signature items as fried chicken, soft-shell crabs and shrimp-in-a-basket.
Lake, born and raised on the restaurant property, turned Peerce's into an upscale restaurant with a continental menu.
In recent years, the restaurant has had a high turnover of chefs and maitre d's, but Yumkas was optimistic for the future.
"The restaurant has to operate profitably from here on out, and we don't see any reason why it can't," he said.
Sandy Kraut, manager of operations at the restaurant, said business has picked up after some slow summer months.
"We've had an incredibly busy September and October, over and above last year," she said. "We're going to look at operations from top to bottom. We have time to now."
Lake said that averting the auction has made him "extremely happy."
"The people that have enjoyed Peerce's over the years will be able to continue enjoying Peerce's as they always have," he said. "That's the good news: We're alive and well."