By Mark Baumgarten From Seattle News

Shedding some light on the mystery surrounding Tuesday’s sudden closure of beloved sandwich shop Paseo, the company filed for bankruptcy yesterday afternoon.

In the petition to the United States Bankruptcy Court (included at the bottom of this page), Paseo Caribbean Food, Inc. notes that it owes undisclosed amounts of cash to both the Internal Revenue Service and the Washington Department of Revenue, signalling that the company was having significant tax trouble.

In addition to those priority claims, there are also liabilities totalling $30,425. Some of that is owed to the company’s vendors ($10,000 to Macrina Bakery and $10,000 to Sea Bend Meat), as well as a handful of utilities (Century Link, Puget Sound Energy, Seattle Public Utilities, Waste Management).

And then there are the employees.

When Paseo put up signs at its two locations informing hungry customers of its demise, the news ellicited deep sadness on social media. But that outpouring was soon followed by anger and frustration from some when a September lawsuit accusing the business of wage theft and discrimination was made available online.

The plaintiffs in the lawsuit are mentioned as creditors here, though the amount of money owed is listed as “unknown.”

In addition to those former employees, the petitions notes 16 additional workers who are collectively owed more than $6,000 in wages.

What the bankruptcy means for those employees is up in the air, though it’s possible that the company’s ownership, including its mysterious president Lorenzo Lorenzo, could be held personally liable. There is no record of any personal bankruptcy petitions in connection with the company.

The bankruptcy’s full impact on Paseo’s vendors is yet to be seen, but in at least one case it appears that the company’s inability to pay for the ingredients to its heralded sandwiches is a recent development.

“It’s just so sad,” said Macrina Bakery wholesale accounts manager Rebecca Early, referring to the closure of the company’s two Seattle locations. “They’ve been one of our best customers for over a decade. They’ve always been very kind and easy to work with, a dream client. Just one product, every single day. They always paid their bill on time.”

According to the petition, the cash-only restaurants were doing brisk business, grossing $1.7 million since the beginning of the year, on pace with 2013’s gross of $2 million (which was up 25 percent from the year prior).

As for assets, the company is claiming $81,971 of personal property, including $2,000 cash on hand and more than $8,000 in a Los Angeles bank account. Paseo also claims more than $45,000 in equipment, from toasters to ovens to freezers, which will likely be auctioned off at some future date. So, if you’ve been thinking about starting a sandwich shop, now might be the time.

IMAGE: Paseo says farewell to its diners. Photo by Jeremy Dwyer-Lindgren

Paseo Bankruptcy Document

For more on this story go to: http://www.seattleweekly.com/home/955329-129/paseo-caribbean-food-declares-bankruptcy-signals