Article published Aug 3, 2005 in The Concord Monitor

by ANNMARIE TIMMINS

The former owner of Brianas' Bistro in downtown Concord has a new plan for settling the nearly $294,000 she owes more than 90 people: After failing three times to pay some of the debt under business bankruptcy protection, Penelope Brianas will ask a judge to instead forgive the debts under personal bankruptcy, according to court records.

It would be at least the second time Brianas has pursued personal bankruptcy to escape her debts. According to bankruptcy court records, Brianas successfully had her debts forgiven six years ago, two years before she opened her upscale restaurant at 90 Low Ave. (It closed in April 2004). Bankruptcy laws allow someone to pursue personal bankruptcy protection every six years.

If Brianas is successful again, state laws will allow her to keep many of her assets, but most of the 96 people and businesses waiting for money from her won't see it.

"There is a certain minimum (of belongings) that the state of New Hampshire feels people are entitled to," said bankruptcy lawyer Dan Proctor of Concord. "Jewelry and furs - up to $500 - are exempted, and clothing is completely exempted up to any amount. I don't care if you have a Jackie O original, it's exempted."

Brianas would, however, be obligated to pay any fines handed down in the criminal case pending against her. Brianas is charged with theft by misapplication of property for allegedly keeping $2,900 in child support payments she was garnishing from employee's wages. She pleaded not guilty to the charge.

Brianas, who now earns about $500 a week working as a waitress for the Weathervane seafood restaurant on Route 1 in Kittery, Maine, declined to be interviewed yesterday. "Leave me alone, I'm not in business anymore," she said, before hanging up.

She indicated her intentions to pursue personal bankruptcy in July when she applied for a court-appointed attorney to represent her in her criminal case. The application required Brianas to state her personal savings, which she listed as zero. She also wrote she was planning to file for Chapter 7 personal bankruptcy this month.

According to bankruptcy court records, Brianas has not filed the personal bankruptcy application yet. Her lawyers, both the public defender representing her in the theft case and her previous bankruptcy lawyer, were unavailable for comment yesterday.

Brianas opened her restaurant, which was celebrated for excellent food and knocked for poor service, in March 2001. A year later, she filed the first of three applications for federal bankruptcy protection under Chapter 13, which would have allowed her to continue operating the bistro while trying to pay some of her debts.

Among those waiting on money from Brianas is her former landlord, Mark Ciborowski, whom she owes $67,000, and the state Department of Labor, which says Brianas owes $5,700 in back wages and $13,400 in penalties. Brianas also owes the Internal Revenue Service $75,000. The list of creditors also includes the Friends Program, a local nonprofit, a local gardening center and copying service, and the Concord Hospital.

A federal judge has dismissed each of Brianas's three Chapter 13 applications because Brianas failed to make scheduled monthly payments. The most recent Chapter 13 case, filed in March 2004, was dismissed in July 2004.

Joshua Menard, a bankruptcy lawyer for Preti Flaherty in Concord, said the difference between Chapter 13 and Chapter 7 protection would be important to Brianas's creditors. "Under Chapter 13, you are paying a percentage of your debt over time," he said. "It's still pennies on a dollar, but (the creditors) are still getting something. Chapter 7 is liquidation. If it's a business, it's out of business."

Brianas would still have to pay taxes and, most likely, the back child support and wages. But she would be excused from the rest of her debts, including her overdue rent and medical bills, if she is awarded Chapter 7 protection, Menard said.

What most people don't realize, Menard said, is that Brianas would not have to give up all her own assets.

State law allows her to keep not only her clothes and jewelry but also her car and a certain amount of reading material. Old bankruptcy laws still on the books permit a person to keep a certain number of sheep, their fleeces and other farm animals.

Brianas would also be allowed one "wild card," Menard said, that she could use to keep something worth $1,000 or less not already protected by state law. The businesses and people due money from Brianas would get a chance to address her and the judge in bankruptcy court, but their sentiments are not binding, he said.

"They get to vent a bit," Menard said.