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To outcry, Brigham’s heads to bankruptcy

By Megan Woolhouse
Globe Staff / November 20, 2009

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When sheriff’s deputies unexpectedly told employees at the Brigham’s restaurant in Arlington to leave last Friday, locking the doors behind them, longtime waitress Kathy Hogan was angry. But not at the county officers.

The owner of the failing ice cream shop chain, Luke T. Cooper, is “terrible,’’ said Hogan, who waited tables at the Arlington location for 37 years. “It’s very obvious he doesn’t care about people or give a damn about them.’’

The abrupt closure, caused by a landlord’s eviction of the restaurant for failure to pay rent, meant she was unable to say goodbye to regular customers she considered family. They included an elderly blind woman who relied on Hogan to read her mail aloud most days.

The restaurant chain - once a household name in New England - is expected to file for bankruptcy today, and the 13 locations operated by Cooper’s company, Deal Metrics LLC, are closing, Cooper said this week. About a dozen independently owned stores that feature Brigham’s ice cream remain unaffected by the bankruptcy.

That will leave only a hint of a chain that once had more than 100 restaurants across Massachusetts.

Hogan and many other former Brigham’s employees say Cooper, a 33-year-old equity investor based in Baltimore, betrayed the Brigham legacy. They say that in less than 18 months he appears to have dismantled the last vestiges of the 95-year-old institution.

Deal Metrics has already shut down at least five of its 13 Brigham’s, including shops in Brockton, Danvers, and Peabody. In all, about 200 people will be out of work just before the holidays.

Employees say they suspected something was amiss; they were paid in cash in recent weeks and health insurance was canceled months ago.

But they did not expect the end to come so swiftly.

Brigham’s customers have been swamping Cooper with e-mail messages blaming him for ruining a piece of local culture.

“They’re angry that someone is taking away their clam chowder and taking away their frappes,’’ Cooper acknowledged in an interview Wednesday at an upscale steakhouse in Baltimore. But, he said, the business had been mismanaged for years before he bought it.

People “think I’m some kind of guy who saw an opportunity and took advantage of it, and to some degree I am that guy,’’ he said. But “we’re not just another investment firm seeking outsized returns for our investors. We’re not [company] killers.’’

Deal Metrics bought part of the financially ailing Brigham’s company in 2008 for an undisclosed amount from New England Capital Partners, a Newton private equity firm that owned it for four years. Kevin M. McCafferty, chairman of New England Capital Partners, could not be reached for comment yesterday.

Cooper’s timing was not good. Regional chain restaurants have struggled against growing competition from national companies and, more recently, they have been pummeled by the economic slide as consumers cut back on dining out.

New England Capital Partners sold the Brigham’s ice cream brand name to HP Hood in 2008. The Tron Group, another Boston equity firm, engineered the deal and oversaw the sale of the restaurants to Deal Metrics.

Cooper acknowledged the Brigham purchase was his first attempt at turning around a restaurant company in trouble. The only other venture listed on his website, www.dealmet.com, is for Charity Home Raffle, a Baltimore group that raffles foreclosed homes for nonprofits. He said he has worked with other businesses but declined to name them. Cooper, a graduate of the Syracuse University College of Law, is a lawyer in good standing.

The website also listed Cooper’s credentials. It says he “completed graduate work in finance from Yale University School of Management (’02) and the University of Chicago GSB,’’ or Graduate School of Business. But officials for the two universities said they have no record of Cooper completing graduate work as a full-time or part-time student. Yale said Cooper signed up for a summer course in 2004 but was a “no-show.’’

Asked about the discrepancy, Cooper declined to answer. “It’s immaterial, my educational background as it relates to this business,’’ he said.

Cooper said he bought the restaurants despite the fact they were $1.1 million in debt because he thought he could make improvements that would boost profits. He said he consolidated vendors, improved the company’s website, and reassigned employees. But the recession, combined with high rents and other problems, hurt business, he said.

For example, he said, the Brigham’s location on High Street in Boston cost $25,000 a month to rent. Lincoln Properties, the building’s owner, could not be reached for comment.

“The reality is that businesses go out of business all the time. Brigham’s is no different,’’ Cooper said.

Yet employees point to what they say was a gradual decline in service and quality under Deal Metrics’ tenure. The menu grew thinner. and some restaurants fell into disrepair. In some locations, rent has gone unpaid for months, they say, and vendors - those who continued to deliver - were typically paid by managers with cash from registers.

Diane Dunleavy, who worked at the downtown Boston Brigham’s for 21 years, said her paychecks bounced in the last several months, so she started cashing them at the restaurant. She said she called the attorney general’s office to complain when her health insurance was suddenly dropped. The attorney general’s office said it could not say whether it is investigating claims against Brigham’s.

Dunleavy called Cooper “a capital investor taking all the money and that’s it.’’

“I don’t think he knew the kind of place Brigham’s was,’’ she said.

Brandie Holmes, who had worked at the Braintree restaurant for a decade starting when she was 15 years old, quit in July. She said although she was promoted to manager, she was consistently paid at a waitress rate (a little more than $2 an hour) and was told it was an accounting error that would eventually be corrected.

“As soon as Luke Cooper took over, things really started to change,’’ she said. “I found it was in my best interest to move on.’’

Sitting in a Baltimore restaurant where the waiter knew his name, Cooper denied any wrongdoing, and said Brigham’s employees should have realized the chain did not have a future.

“They knew it had an expiration date,’’ he said.

And when asked about the employees’ pay claims, Cooper said he would “love to sit down and talk’’ to those who say they were treated unfairly.

“Bankruptcy court will ultimately decide what we owe our employees and other creditors,’’ he said. “If, in fact, there are obligations to them.’’

Megan Woolhouse can be reached at mwoolhouse@globe.com.

Former employees Rose McGuire, Kathy Hogan, Claire Barrett and Marie Perkins stood outside the recently closed Brigham's in Arlington. (Aram Boghosian/Globe staff) Former employees Rose McGuire, Kathy Hogan, Claire Barrett and Marie Perkins stood outside the recently closed Brigham's in Arlington.