WILMINGTON — A culinary institution near Wrightsville Beach with three decades serving Wilmington diners has closed.
On Friday, Feb. 7, a bankruptcy notice was on the door of Sweet n Savory Cafe, effectively shuttering its 1611 Pavilion Place operations immediately.
Owner Rob Shapiro, represented by J.M. Cook, filed Chapter 11 bankruptcy in October for his SNS OG, LLC. Chapter 11 allows businesses to restructure and keep operations going while owners come up with a feasible plan to pay overdue debts. Shapiro had successfully done this before in 2012 and 2017, according to court documents.
However, continuing operations without sufficiently paying taxes led to the restaurant’s court-ordered closure. Acting United States Attorney Daniel P. Bubar, on behalf of the Internal Revenue Service, supported the bankruptcy administrator’s emergency motion that Chapter 11 roll into Chapter 7, which is a liquidation — selling of assets — to pay creditors. The bankruptcy administrator is listed as Brian Behr.
The motion was granted in a hearing on Thursday, Feb. 6.
Court documents indicate the North Carolina Department of Revenue filed a claim of more than $150,000 owed in November.; the same month the IRS also filed more than $740,000 owed. Of the latter amount, $543,000 is secured by statutory federal tax liens; the IRS did not agree to cash collateral securing the debts, court documents detail.
There has to be sufficient cause to convert a Chapter 11 case to Chapter 7, which the courts found were evident with Sweet n Savory. The filing lists gross mismanagement of the estate and failure to properly file financial reports for the courts to monitor progress during Chapter 11, calling those disclosures a “lifeblood” to the process.
“They are the means by which creditors can monitor a debtor’s post–petition operations, and, as such, are an important obligation of a debtor in possession,” according to the petition filed.
Chapter 11 filings noted Sweet n Savory had anywhere from $500,000 to $1 million in liabilities, owed to less than 50 creditors, and assets accounting for less than $50,000.
The court agreed to Chapter 7 due to unauthorized use of cash collateral to pay creditors, and substantial and continuing loss showing there was an unlikely chance the restaurant would rebound. More so, it found the debtor couldn’t come up with a plan of action on his own accord.
The petition noted Shapiro did not put aside enough funds “to pay the outstanding payroll tax obligations and sales and use tax obligations for January 2025” and indicates using this money to continue operating the restaurant falls into “gross mismanagement.”
News was posted to the restaurant’s social media on Friday that it closed “due to unfortunate circumstances.” Shapiro told news outlets he couldn’t sustain the business after enduring a slow start to the year. According to the Wilmington Business Journal, he said he needed upward of 2,500 customers weekly to keep the cafe afloat, but since Covid-19 had failed to reach between 1,500 and 2,000 weekly.
Sweet n Savory has been operational since 1994 and was known for its affordable breakfasts, lunches and dinners. In addition to Pavilion Place, it also once had a downtown location in the late ’90s and early aughts. It closed eventually, but Shapiro desired to bring a downtown location back in the Soda Pop District in 2018, though plans fizzled.
This came on the heels of the restaurant being featured on Guy Fieri’s popular show, “Diners, Drive-Ins and Dives,” airing on Food Network.
Shapiro also wanted to open a location in Leland and created a Kickstarter in 2019 for it, but it, too, never came to be.
The restaurateur did launch various offshoots, however, including in 2012 The Pub at Sweet and Savory, which closed in 2017. He then opened Sweet n Savory Epicurean Bistro in 2022, centered on French cuisine; it closed last year.
As the original cafe and bakery follows suit, court documents note priority tax claims filed by the IRS or state Department of Revenue must be paid with interest within five years of the petition date.
Algernon Butler III, with Wilmington law firm Butler & Butler L.L.P, will act as interim trustee in the proceedings.
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