A lawyer representing former Upper Crust pizza workers on Wednesday filed an objection in US Bankruptcy Court to the sale of any of the pizza chain’s stores to entities affiliated with founder Jordan Tobins.
Upper Crust filed for bankruptcy protection in October, with $3.4 million in debts and owing $850,000 in back wages and damages to employees following a Labor Department investigation. At an auction held last week, the high bidder for the assets of four former Upper Crust locations was UC Acquisition, an entity attorney Shannon Liss-Riordan alleges it has ties to Tobins.
In the objection, Liss-Riordan argues that the court should not approve the sale of the stores — in the South End, Lexington, Wellesley and Watertown — because Tobins’ assets should be “preserved for satisfaction of his debts to the creditors,’’ or his former workers, who are suing him in a class action case filed against the chain. The Superior Court has barred Tobins from transferring any assets over $2,500, she noted.
In addition, Liss-Riordan argues that the court should deny any effort by Tobins to regain control of the restaurants because of his role “as the mastermind behind the scheme to pressure Upper Crust employees to pay back to the company their Department of Labor-ordered back wage payments.’’ Tobins also has been sued by his business partners for allegedly embezzling hundreds of thousands of dollars from the company.
A lawyer for UC Acquisition, Christopher J. Panos, insisted Tobins is not a part of the bid, and that the offer was made “in good faith.’’ However another executive involved in the proposed purchase acknowledged that Tobins may be engaged as a consultant or employee of UC Acquisition.
UC Acquisition Co. is owned by Ditmars Ltd., an investment fund managed by Quabbin Capital Inc. in Boston. Ditmars has had prior financial dealings with Tobins. In an e-mailed statement in response to questions from the Globe, John Snow, managing director of Quabbin, said, “Tobins is not an investor in the funds managed by Quabbin. While UC Acquisition Co. intends to engage Tobins as a consultant or employee to benefit from his operating and marketing experience, it does not yet have an agreement with Tobins.’’
A lawyer for Tobins was not available for comment. A hearing on the objection is scheduled for Friday at Bankruptcy Court in Springfield.
Panos, the attorney for UC Acquisition said in a statement, “Ms. Liss-Riorden seems to imply in her opposition that UC Acquisition Co., LLC and Ditmars Ltd. are ‘fronts’ for Jordan Tobins. UC Acquisition Co. will put on evidence that will demonstrate that that is simply not true.’’ He also said the company has fully disclosed its connections to the debtor.
Liss-Riordan said in an e-mail that she has made repeated efforts to reach Tobins through his lawyers but has been rebuffed. She said in an e-mail that any assets under Tobins’s control “should first go to paying back the workers at Upper Crust, before he starts getting involved in new businesses.’’
Tobins founded Upper Crust on Beacon Hill in 2001 but was placed on leave this year after being accused by co-owners of misusing company funds for personal expenses. Upper Crust filed for bankruptcy protection after years of financial and labor troubles. As the company expanded its pizza empire over the past decade, it relied on a steady flow of immigrants from a poor village in Brazil, the Globe reported in a 2010 investigation.
Upper Crust abruptly closed most of its restaurants in November, letting go about 140 employees.
Tobins still controls two restaurants that remain open in Brookline and on Beacon Hill. Four independently owned franchises that are not part of the bankruptcy are operating in Plymouth, West Roxbury, Newburyport, and Portsmouth, N.H.
At a bankruptcy auction last week, buyers submitted bids on 10 stores for a total of about $1.5 million, subject to court approval. Some of the winning bidders included Liss-Riordan, along with another investor, for the Harvard Square location; they have said they intend to give employees ownership shares in the restaurant.
Other bidders included Boston Restaurant Associates, which runs the Regina Pizzeria chain, for a store near Fenway Park. The Plymouth Upper Crust franchisee Al Carvelli got the Hingham lease.