Oyster Bar Files for Bankruptcy

The parent company of the restaurant in Oak Bluffs has filed for Chapter 11 bankruptcy protection for the second time in just more than two months, according to papers filed in federal court in Boston Monday morning.

Court records indicate that MAD Corp., LLC, owes payment to 17 creditors, including the Edgartown National Bank, the Internal Revenue Service and the Town of Oak Bluffs. Edgartown National Bank is owed more than $700,000.

Monday’s court filing is the latest in the Circuit Avenue restaurant’s recent bout of troubles.

MAD Corp. previously filed for Chapter 11 bankruptcy protection on January 14. That day, the restaurant, its furniture and its fixtures were scheduled to be auctioned off.

In February, Oak Bluffs officials discovered that the restaurant had been operating without a valid year-round liquor license and temporarily disallowed the restaurant to reopen.

The Oyster Bar’s liquor license allows it to sell alcohol from only April 1 to December 31. Town officials said the restaurant offered alcohol for sale outside of that time-frame at various points during the past two years. Police informed the restaurant’s manager, Michael Gillespie, that he would be arrested if he reopened the restaurant without proof of a year-round license.

The Alcohol Beverages Control Commission (ABCC) twice denied the Oyster Bar's application for a year-round license, first in February 2008 and again on February 4, 2011. Both times the ABCC listed failure to comply with state tax laws as the reason for rejecting the request.

The restaurant was cleared to reopen on February 11.