1205 Third Street South, Naples, FL
The landlord wants Handsome Harry’s out.
Neapolitan Enterprises LLC has sued to evict the bistro, off Third Street South in downtown Naples, saying it violated its lease terms.
The upscale restaurant is jointly owned by Jerry Williams, the indicted ex-CEO of the failed Orion Bank in Naples, and David Wannstedt, an assistant coach for the National Football League’s Buffalo Bills in New York. The two were close friends when they became partners in the business.
The legal battle, playing out in Collier Circuit Court, appears to have started after Wannstedt attempted to sell his interest in the eatery to a long-time local restauranteur, Michael Hernandez, who has been operating Handsome Harry’s since January.
Hernandez said Wannstedt never really had a role in running the restaurant.
“He’s moved up to Buffalo. His new job is up there. He just wants to move on with his life,” Hernandez said.
According to court records, once Neapolitan Enterprises learned about the transfer of ownership, the landlord threatened to end the restaurant’s lease unless the transaction was “unwound.” The landlord claims its approval is required for a change in control and its approval was not sought.
Even after the deal to change ownership was called off, the landlord moved to terminate the lease May 9.
Naples attorney Stephen E. Thompson, who represents Neapolitan Enterprises, declined to comment.
Meanwhile, the restaurant is fighting back with its own lawsuit.
WW Handsome Harry’s of Naples LLC, representing the owners, and Wannstedt and Hernandez personally have sued the landlord, hoping to keep the restaurant open. They argue the lease is not in default, as the landlord contends.
“We seriously do not understand what we are fighting about right now,” Hernandez said.
He still hopes to buy a 50 percent share in the restaurant.
“It’s really cut and dry as far as we are concerned,” Hernandez said. “There is no doubt that we can transfer the interest that I was taking over. But they (the landlord) see it differently.”
He said the landlord agreed not to declare a default if his deal with Wannstedt was “unwound,” but then did it anyway. The purchase agreement between Wannstedt and Hernandez, which was to take effect at the end of the year, was cancelled May 4.
“We don’t feel that there is any right for what they are trying to do,” Hernandez said.
It appears the landlord is trying to “pick and choose who can be the owner of the restaurant,” he said.
In its lawsuit, Neapolitan Enterprises alleges the lease terms were violated in several ways. The other defaults, the suit states, happened when:
■ Williams and Wannstedt pledged their interests in the restaurant to Florida Community Bank for a business loan, without its knowledge or consent. The loan went into default.
■ When Handsome Harry’s representatives admitted “insolvency.”
■ When the restaurant’s operators failed to supply all of the documents the landlord demanded to audit the business to determine if it was paying enough rent, based on its gross sales.
The landlord has been given all sorts of financial information, but only what’s relevant, Hernandez said. There is a dispute over the documents the landlord can legally obtain and review.
No one ever told the landlord the restaurant was insolvent, Hernandez said.
“It’s 100 percent false. We don’t know what they mean by that. The rent has never been late,” he said.
When it comes to the financing from Florida Community Bank, the restaurant’s owners contend in their lawsuit that they did not violate the terms of lease because they pledged their interests in the business, not in the lease.
Hernandez questions whether there are are other motives behind the eviction.
“I don’t know if it’s a personal thing or what,” he said. “I don’t have any insight into that part of it at all.”
He said he’s tried to talk to the landlord “but they haven’t had any interest in talking to me.”
“We’ve tried to figure out why they are taking this tactic,” Hernandez said. “I don’t think they know me.”
Hernandez has been in the restaurant business for 30 years. He’s opened a handful of restaurants in Southwest Florida. Restaurants he’s been involved with include Bistro 821 and Zoe’s in downtown Naples, Aqua Grill at Waterside Shoppes in North Naples and Bistro 41 at the Bell Tower Shops in Fort Myers.
Hernandez said he’s never met Jerry Williams, who was indicted on bank fraud charges in March. The charges Williams faces carry a maximum penalty of 220 years in prison. If convicted, Williams could also face millions in penalties and be ordered to pay restitution to Orion Bank shareholders. His trial is set for February.
Hernandez said he’s unsure whether the indictment has anything to do with the landlord’s attempt to evict Handsome Harry’s or Wannstedt’s desire to get out of the partnership. Wannstedt was also a shareholder in Orion Bank.
Handsome Harry’s opened in 2006.
Hernandez said he’s interested in investing in the restaurant because he likes the downtown location off Third Street South and 12th Avenue South.
“It’s a great area so it definitely piqued my interest,” he said.
Connect with Laura Layden at www.naplesnews.com/staff/laura_layden.