SAN RAMON, CALIFORNIA — When LB Steak abruptly closed in San Ramon in June, the announcement left employees, customers and even some people with unused gift cards scrambling.
Now, a newly reported lawsuit is offering more insight into the serious financial pressures facing the restaurant’s parent company before the closure.
Samson MCA LLC, a merchant cash advance company, is suing Vine Dining Enterprises Inc., related restaurant entities and Vine Hospitality CEO Alistair Levine for approximately $2.4 million.
Significantly for San Ramon, LB Steak Bishop Ranch LP — the entity associated with the local restaurant — is specifically named as a defendant.
The lawsuit was filed July 1 in New York’s Erie County Supreme Court, a little more than a week after Vine Hospitality announced that it was permanently closing its entire portfolio of seven Bay Area restaurants.
The allegations have not been proven in court.
The Company Allegedly Sold a Share of Its Future Restaurant Sales
According to the complaint, Vine Hospitality entered into an agreement with Samson on March 19 — roughly three months before the restaurant group shut down.
Under the alleged agreement, Samson purchased the right to collect $2.345 million from Vine’s future restaurant sales in exchange for an upfront payment.
Vine was reportedly required to send Samson 8% of its ongoing restaurant receipts until the full purchased amount had been delivered.
This type of arrangement is known as a merchant cash advance. Unlike a conventional bank loan with fixed monthly payments, it generally gives a financing company the right to receive a percentage of a business’s future revenue.
The amount Samson initially provided to Vine is not identified in the complaint, making it impossible to calculate the full cost of the financing agreement from the publicly reported figures alone.
Samson alleges that Vine paid approximately $469,000 before stopping its payments.
The plaintiff is now seeking the remaining balance of approximately $1.876 million, along with more than $500,000 in attorneys’ fees. Combined, those demands bring the lawsuit to roughly $2.4 million.
The complaint alleges that the restaurant companies stopped sending the required payments despite continuing to operate and generate sales.
Vine Hospitality and Levine have not publicly presented their side of the dispute. SFGATE, which first reported the lawsuit, said it was unable to reach Vine Hospitality or Samson’s attorney for comment before publication.
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The Deal Came Just Three Months Before Every Restaurant Closed
The alleged timing might provide some useful info RE what happened.
Vine reportedly entered the agreement on March 19. On June 22, the company announced that it would close all seven of its remaining restaurants across the Bay Area.
Those restaurants included LB Steak locations in San Ramon and San Jose; Left Bank Brasserie locations in Larkspur, Menlo Park and San Jose; Petite Left Bank in Tiburon; and Meso Modern Mediterranean in San Jose.
Across Vine Hospitality’s restaurants and corporate office, the shutdown eliminated 365 positions.
Vine said in that notice that it had attempted to secure additional investors or capital but had been unsuccessful, leaving the company without enough cash to continue operating.
CEO Alistair Levine previously attributed the shutdowns to a difficult restaurant operating environment and unsuccessful efforts to raise money connected with two proposed San Francisco restaurants.
He also pointed to rapidly changing ingredient costs and the uneven post-pandemic economy as major challenges for Bay Area restaurants.
The new lawsuit does not establish that the merchant cash advance caused the restaurants to close. It does, however, indicate that Vine was raising money against its expected future restaurant sales just three months before the entire business shut down.
A Sudden Ending for One of SR’s Fanciest Restaurants
LB Steak opened in San Ramon in 2021 and became one of the center’s longer-running original restaurants.
The upscale steakhouse occupied a prominent space along the shopping center’s central plaza and served steaks, seafood and cocktails in a setting designed for business dinners, celebrations and special occasions.
We reviewed it recently and the food was great.
Its closure was especially conspicuous because it was not an isolated decision involving an underperforming San Ramon location. Vine Hospitality closed every restaurant it operated across the Bay Area within a matter of days.
The larger company traced its history to 1994, when Ed Levine and chef Roland Passot opened the original Left Bank in Larkspur. Over the following three decades, the business grew into a regional restaurant group spanning French brasseries, steakhouses, Mediterranean food and Italian dining.
That entire remaining portfolio, sadly, is now closed.
For San Ramon diners and the local employees affected by the shutdown, the lawsuit adds another piece to the still-developing story of how a prominent restaurant group went from operating seven Bay Area restaurants to closing all of them.
