More than two months ago I called Tim McKee, a man whom I have the utmost respect for, a person I consider my friend (still do) and had to ask him an uncomfortable question. “ Is it true?” I said, “Did your partner Josh Thoma take money from one restaurant to pay bills at another?”
Now, this would not be a problem, just an accounting issue, if the two of them owned 100 percent of all their restaurants. They don’t. They have byzantine partnership arrangements at Solera and La Belle Vie; they had working partnerships at Bar La Grassa; and they had consulting contracts for an LLC they ran at Barrio. So robbing Peter to pay Paul was not kosher.
Tim could not comment during that phone call. His view was that he wanted to work out whatever problems he could with his partner of 13 years and he wanted to do everything he could for his employees and his reputation. He also had legal obligations that precluded him from talking about much of the issue at hand. His hands were tied to a major extent. That’s changed. “At this point I need to share some of my story, put it out there, and I need to repair my reputation and my restaurant’s reputation," Tim said. "Emotionally I am drained and it affects our work.”
So here are the snapshots from our call last night. A call he wanted to make after talking to Rick Nelson in the Strib the day before. That piece brought out a firestorm of reaction from former partners at Barrio (see my post from yesterday below). I think it also convinced Tim to get out there and speak his mind.
Here’s what Tim told me . . . he was in Yucatan researching food when one of his partners at Barrio called and told him money had been moved from one restaurant to pay bills at another. Dollars had been moved from BLG to LBV, from Barrio to LBV, and then from LBV to Solera. Josh was the business guy and Tim was the food/concept guy (to simplify this for everyone), and the group at large confronted Josh, who according to Tim, admitted to the malfeasance. The team began working on solving the problems from an accountability standpoint, and they were shocked. Never once in any of the financial meetings over the previous months had Josh brought this up. He was not taking the money for himself it appears; he was only doing so to keep Solera, and to a lesser extent, LBV afloat. Tim insists LBV can work on its own, that Barrio is doing well, and that Solera has been in trouble at varying times over the last year due to the economy.
“Josh put himself at risk, put my well being at risk, my family, our employees . . . he put everyone at risk here,” Tim said. “And I should also point out that Josh supervised these transactions; he may not have made all of them himself.” That’s not unusual in this business since often times other office employees are authorized by the business partner to transfer dollars and do banking business. But Tim stressed that Josh was in charge of everything to do with finances and business decisions for the restaurants they were involved in.
Since this has all dribbled out in the past months, and after talking with the partners in various businesses, Tim decided to serve papers and begin the process of dissolving his partnership with Josh at LBV. Tim said Josh refused to do so willingly. As of today, Josh is still “there” technically, but Tim thinks he will be out within a week. Figuring out other partnership structures, Tim says, is trickier because of the legal arrangements and ownership statuses at those businesses. Tim also told me that all the funds have essentially been accounted for and that none of the monetary shell game seems to have been used for personal gain.
“I lost trust in my partner of 13 years," said Tim. "That partnership is gone. I lost my emotional and physical investment in Barrio; this has put an unfair and tremendous strain on all my employees and my investors and partners are rightfully very wary about everything.” And Tim told me that one of the worst parts about this is that his friend, Isaac (Isaac Becker of 112 and BLG), and he are not close anymore. “I had no idea that any of this was going on [Josh’s malfeasance], none. I was drinking the Kool-Aid and trusting my partner, Josh. But Isaac doesn’t believe that entirely and that hurts me. And now, I am suing my partner. This is a terrible situation, and as it goes down the road I will keep you in the loop.”
I have known Tim for 18 years. He has always been a man of the highest integrity and frankly interested in only two things only: his family and his cooking. He’s not comfy in a spotlight, and he left all the decisions on many matters to Josh. What he told me is one man’s opinion, but hearing it from him makes sense of a lot of madness.
Later today I am talking to Isaac Becker about what went on at BLG and will clue you into what he says as I learn it. More will be revealed.
Most interesting now is the absence of commentary from all of the bloggers and food writers in this town who, for some reason, are willing to talk about this for hours at cocktail parties but won’t mention a thing elsewhere. Maybe they are afraid they wont get a free drink next time they are in the restaurant? Weird. Despite what anyone thinks or how uncomfy this all is, these guys are James Beard award winning, major league championship caliber operators with a large restaurant empire in this town, and if you write endlessly about them when they change a menu or run a bar special then why are you not writing about this angle of it too? It seems strange to me. Anyway, as this story unravels I will be talking about it until it ceases to be relevant.
At a certain point, it does no good to re-hash old facts but this tale has legs and the sooner it’s out, the sooner it’s over and everyone, especially the restaurants, can get back to what they do better than anyone else—make great food.
Previously Posted: Barrio Split—The Details Emerge
June 3, 2010, 1:30 p.m.
For weeks now, the restaurant community has been talking about the dissolution of the partnerships that founded Barrio and Bar LaGrassa, specifically Tim McKee and Josh Thoma’s exit from those partnerships. All the principals have maintained very tight lips about the circumstances and details, but it appears that comments in today’s Star Tribune have frayed the bonds of silence. Last week, we got a call from Barrio announcing that McKee and Thoma were officially no longer involved with the restaurants. It was reported in the paper today, thusly:
Its official - chef Tim McKee, along with business partner Josh Thoma, are out at Barrio. “Our contract is up,” said McKee. “We got them started and their way, and now they’re taking it in another direction” (Barrio partners Ryan Burnet and Tim Rooney could not be reached at press time). McKee said that he and Thoma, partners in Solera and LaBelle Vie “traded their small ownership stake” in the two constantly packed tequila-and-tacos outlets. A third Barrio, with more of a restaurant emphasis, is in the works for the 50th and France area in Edina. According to everyone I have spoken to, this is not all of the story. According to one of the partners (Ryan Burnet, whom I spoke to just today), that version is spin. “Tim and Josh had a contract that was terminated for cause” as of April 14. The cause was “mismanagement” and they “relinquished their equity” as part of that agreement. Burnet is also a partner in Bar La Grassa and continues to be one of the partners in all the Barrio group. He told me Cocina del Barrio will open at 50th & France with Bill Fairbanks running the food side.
I hope to talk with Josh and Tim in the next 24 hours, but prior to this point they have been unwilling to discuss details. Several people have told me that more than one La Belle Vie, Bar La Grassa, and Barrio investor is eager now to talk about the issues surrounding Thoma’s hasty departure from La Grassa and why Tim and Josh would leave Barrio when it’s a smash hit. You leave a sinking ship, not a healthy, popular, industry-leading concept.
Why is this a hot topic? It’s not just mere industry gossip. It’s because when you have a James Beard Award winning chef and arguably the most successful local restaurant operators of the last half-decade struggling to explain why partnerships are disintegrating it piques everyone’s interest. As I have said many times in the last few months in this space, there is a lot more here than meets the eye. Stay tuned.