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Rotelli Declares Bankruptcy, Auction Called Off, Restaurant Still in Business

by on April 23, 2015 12:00 PM

The owners of Rotelli have declared bankruptcy in a move that prevented the restaurant's liquor license and equipment from being sold in a sheriff's sale.

The Italian restaurant is located at 250 E. Calder Way. Everything was supposed to be auctioned off Thursday morning, including the refrigeration units the pizza ovens and even the chairs.

But co-owner David Krauth says the auction was called off -- emphatically stating that his business was never in danger of closing.

"We've been working on negotiations with PNC [Bank] for quite awhile," says Krauth. "At the eleventh hour there was a change from PNC's end which we did not anticipate."

Krauth says he had expected to reach some sort of reconciliation with the bank before now. When that didn't happen, he says, "We had to make other moves to stop any auction."

And that involved Krauth and partner Mike Hughes filing for Chapter 11 Bankruptcy in the U.S. Bankruptcy Court in the Middle District of Pennsylvania.

A spokesperson for PNC Bank says the bank can not discuss a client's financial situation and could not even confirm that an auction had been arranged.

Krauth suggests that media reports about Rotelli's financial troubles were overblown.

"We're going to be open for quite some time," Krauth explains. "Last year you guys and everybody else printed a story that we were closing and all hell broke loose. ... That's what we're trying to avoid this time. We're going to continue negotiations with PNC and we're going to come to a resolution with them that's going to be good for all parties and it's going to keep us open for a long time.

"There will be no auction."

Asked if a new partner or additional financing had been arranged Krauth declined to go into details. "As I told everybody for the past month, who asked me, [an auction's] not going to happen. I'm not going to let that happen. So, we did what we had to do to make sure of that."

It was widely reported that Rotelli's owners were behind on the rent and owed $190,000 dollars, but Krauth says that's not a problem. "We're in a very good place with our landlord," he says.

The landlord could not immediately be reached for comment.

Krauth has been in the restaurant business for over 25 years, much of that time spent in the Pittsburgh area. Krauth explains that he and his partner came to State College because, "There was no good Italian option downtown."

Rotelli is set to celebrate nine years in business come July and Krauth says business is great, "Our largest growth area right now is catering. We're exploding with catering. I have 20 caterings in the next two weeks. We're really trying to reach everybody we can with the catering business -- the university, homes, all those sorts of things."

And he's adamant that the doors to Rotelli will stay open. "We will be financially solvent, extremely soon," he says before adding, "We will be open for a long time."

 

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Steve Bauer was the Managing Editor of StateCollege.com. Steve and his wife Trina are longtime area residents. They reside in State College along with a wacky Golden Retriever named Izzy.
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