Chung Cho with Leff in November 2014.
The fate of New Haven workers’ lost wages may get tied up in a bankruptcy filed by the former owner of Gourmet Heaven.
That was the upshot of the latest court maneuvering in a suit filed by six employees who sued Cho Chung, former owner of two downtown Gourmet Heaven delis, for violating minimum wage laws by overworking and underpaying them.
Chung didn’t appear at a hearing before U.S. District Judge for the District of Connecticut Vanessa Bryant in Hartford Friday morning. But his attorney David Leff did.
Leff solo at U.S. District Court in Hartford Friday .
Leff asked Bryant for an automatic stay of the case for Cho brought by the six former employees. If the judge grants the motion, the lawsuit which was filed against Cho and his business Gourmet Heaven, would be fold into a Chapter 13 bankruptcy case Cho has filed.
The former employees’ attorney, New Haven Legal Assistance Association attorney James Bhandary-Alexander, argued Friday that while a stay is warranted when it comes to Cho’s personal debts, Cho’s business, Gourmet Heaven, should remain on the hook for employees stolen wages. He also argued that Cho’s wife should be added as a defendant in the case because though her name isn’t on the business she ran it when Cho was out of town, and had the authority to make decisions that impacted employees.
Bryant questioned Leff in detail about what happened to money that Cho received for his business when he lost his lease from the landlord, Yale University Properties. Yale pushed Gourmet Heaven out in the wake of protests over wage theft.
Leff said that Gourmet Heaven, at least in Connecticut, is no longer an active business. “There is no brick and mortar store,” he said. “The store sells nothing, it buys nothing, it has no employees, it pays no wages. It is a shell.”
That’s because Cho was forced to sell his business. The buyer was Sun Yup Kim, who has renamed the two delis at 15 Broadway and 44 Whitney Ave. “Good Nature Market.” Kim bought both stores for about $1.5 million. Leff said Chase bank laid claim to $1 million of that money; $106,000 went to a broker who handled his eviction; $100,000 was set aside in escrow for taxes; $209,000 went to the Department of Labor to pay the overtime wages owed to current and former employees; about $20,000 went to attorneys and $5,000 went to a victim’s injury fund.
THOMAS MACMILLAN FILE PHOTO
Bhandary-Alexander (pictured) reminded the judge that the court had ordered Cho to set aside $175,000 because it had found that he owed at least that much to the six former employees. Bhandary-Alexander said there is no evidence that that was ever done.
“As far as I know, there was never an effort to set aside that amount,” Bhandary-Alexander said. “He could have borrowed it. The Chos had 401ks. We were supposed to ask those questions today [about his finances] but he’s not here. Someone from Gourmet Heaven was supposed to be here, and no one is here. That’s a problem.”
Cho had previously claimed in federal court that he had no assets. Friday’s hearing was planned to comb through the state of Cho’s financial affairs. This is the second such hearing to be scheduled. Cho was supposed to be deposed, but that didn’t happen, after he initially appeared ready to settle. Then he filed for bankruptcy.
In his bankruptcy filing, Cho claims to have between $1 million and $10 million in assets. While his business interests appear to have dried up in Connecticut, Cho still owns a Gourmet Heaven enterprise in Rhode Island, though he is facing similar legal trouble in that state. Cho’s wife is not a co-debtor in the bankruptcy filing.
While Cho is listed as the sole proprietor of the business, the Woodbridge-house that they live in and other personal property is apparently owned solely by his wife. She is actually listed as one of his creditors in the bankruptcy filing.
Bhandary-Alexander said there was an ultimately unsuccessful attempt to settle the case with the six employees for about $125,000 before Cho filed for bankruptcy.
Bryant said that she believed it would in fact be unusual to extend the automatic stay to Cho’s business just because he has filed for personal bankruptcy. “That would be an extraordinary outcome,” she said, but did not make a ruling on the motion.
If she grants the protection to Cho and his business, Bhandary-Alexander will appear in bankruptcy court on behalf of his clients, he said. “This case has been in so many courtrooms.”