Bess Eaton

Providence, RI: (Sep-19-07) UPS brought a lawsuit against Louis A. Gencarelli Sr., owner of the defunct Bess Eaton coffee and doughnut shop chain, alleging that the eatery owed UPS money when it declared bankruptcy in 2004. UPS wanted a loan penalty payment from Gencarelli as a result of bankruptcy filings in 2004 that cleared the way for a Canadian restaurant chain to buy Bess Eaton. Sources claimed that a UPS financing arm, UPS Capital Business Credit, had loaned Bess Eaton $7 million in 2002, $5 million in a 30-year note and $2 million in a 20-year note. Tim Hortons Inc. paid $41.6 million for 42 Bess Eaton shops in a bankruptcy court auction two years later. The money, plus $3 million more generated from the sale of other Bess Eaton properties, was enough to pay all the interrelated debts of Bess Eaton and Gencarelli. UPS Capital claimed that paying off the loans early triggered a $200,000 prepayment penalty. Gencarelli disagreed, and the two sides have been arguing about it ever since. In a settlement reached, Gencarelli agreed to pay UPS $308,000 in a recent ruling by the First US Circuit Court of Appeals. [PROVIDENCE JOURNAL: COFFEE SHOP BANKRUPTCY]

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Published on Sep-20-07