Le Petit Paris detoured en route to guillotine

BRECKENRIDGE — A Summit County district court judge issued an emergency restraining order late Monday afternoon to prevent the Colorado Department of
Revenue from auctioning the contents of Breckenridge’s Le Petit Paris restaurant, which had been seized for non-payment of taxes.

At issue is more than $15,000 worth of restaurant equipment leased by the eatery’s owner from Sanford’s Used Restaurant Equipment.

The Department of Revenue contends the lease between Sanford’s and Le Petit Paris is invalid, and all of the equipment seized should be sold at auction to satisfy the restaurant’s tax debt of slightly more than $18,000.

With the auction scheduled for today, Sanford’s owner, Nancy Peters, went before District Court Judge Terry Ruckriegle to stop the state from selling her assets.

“We’re here because we believe the Department of Revenue is improperly taking my client’s property,” said Sarah Horvitz, Peters’ attorney.

The Department of Revenue took action against the restaurant because owner Arielle Coutouzis failed to pay both sales and withholding taxes.

In business since February of 2007, the Adams Street bistro fell behind almost immediately and made no sales-tax filings at all since January.

State officials seized the establishment and all its contents on July 9, scheduling an auction to recoup the tax shortfall.

“Under the law, when we seize property like that, we have a first lien on all the goods and fixtures,” said Department of Revenue spokesman Mark Couch.

There is a provision for return of leased property to its owners before auction, but it has to be subject to a “bona fide” lease, Couch said.

Although the ruling marks a temporary stay of execution for the restaurant, Coutouzis said she cannot raise the money and has no plans to reopen.

Peters first heard about the state’s legal action from her accountant the day after the seizure.

She was told by an official with the Department of Revenue that her lease was deemed invalid because it was signed by Coutouzis as an individual, not as a corporate entity representing Le Petit Paris.

While buying and selling used food-service equipment is the primary focus of Peters’ Fairplay-based business, she also leases equipment to a handful of restaurants, and Le Petit Paris has been her client since it opened.

“Part of this is my fault,” she said after the court hearing, suggesting that she thought the taxes would be paid or that she could reclaim her equipment. “I kept waiting and waiting for it to be resolved.”

Recalling a conversation with an official at the Department of Revenue early last week, attorney Horvitz said she was given the impression that the state expected Coutouzis to pay the back taxes, forestalling the need for an auction.

It wasn’t until Friday that Peters realized the likelihood of losing her property.

When no official communication was forthcoming from the state, Peters filed suit, claiming the Department of Revenue is violating the statute.

Peters presented the court with a copy of a lease signed by Coutouzis in February that listed items such as refrigerators, an oven and a range that her company provided to Le Petit Paris for a rental fee of about $500 per month.

Aside from Peters’ equipment, there is little else of value in the restaurant, Coutouzis said.

“There’s nothing else, except tables, chairs and the wine,” she said. “I don’t understand. Selling it is not going to cover the taxes.”

Peters’ accountant, Ann Lindsey, who has frequent dealings with the Department of Revenue, said she thinks the lack of other saleable property might be the reason the state wants to sell Peters’ equipment.

“This is very unusual,” she said. “I think they went too long (without collecting taxes), and the only assets left were Nancy’s.”

Despite adequate formal notice, the state did not send a representative to Monday’s hearing.

With Judge Ruckriegle’s 10-day restraining order in hand, Peters said she hopes the lawsuit can be settled without a trial.

Her legal expenses in the case may add up to more than the value of the equipment, but she plans to continue her fight.

“My thought is, somebody needs to do the right thing,” she said.

Harriet Hamilton can be reached at (970) 668-4651, or at hhamilton@summitdaily.com.