VIRGINIA BEACH, Va. (WAVY) – About 20 employees are out of a job and waiting for their paychecks after the city shut down three Larry’s Deli locations due to delinquent taxes.
The abrupt closure happened June 12 at the restaurants on Constitution Drive in Pembroke, First Colonial Road in Hilltop and Upton Drive in Red Mill.
John Atkinson, city treasurer, says Lorilar Enterprises Inc. owed “around $10,000” in personal property and meals taxes.
Atkinson says items were seized from the Hilltop and Red Mill locations, including tables, chairs and kitchen equipment. He says the property will eventually be auctioned off to recoup the tax money owed.
“The businesses were not going to survive, so we took action to protect the city’s interest,” said Atkinson. “Ultimately, the [owner] can redeem his goods by paying what he owes us or we will sell them.”
Employees reached out to 10 On Your Side because they‘ve gone two pay cycles with problems.
Jacqulyn Ford, who has worked a combined nine years for Lorilar Enterprises Inc., says her check for the week ending June 9 bounced and she still hasn’t received a check that should have been issued June 15.
Ford estimates she is owed between $500 and $600.
“You just can’t jerk people around that way,” said Ford. “That’s their livelihood.”
Ronald Newsome, who has worked on and off for the company since 1999, says the owners offered him cash for his June 9 check that cashed but he is still waiting on his June 15 paycheck.
“I want to hear them communicate,” said Newsome. “What’s going on? How can we get our money?”
Larry Speas and Lori Hubble own Larry’s Deli, according to online business records.
“I feel like crap. I couldn’t feel worse. It’s not something we ever wanted to happen,” said Speas, who says he’s been in business 30 years. “I am not happy about it, but I cannot pay them something I don’t have.”
Speas says he owned and operated Schlotzsky’s restaurants, a national chain, up until his franchise agreement was terminated in September following a lawsuit.
He blames the renaming for a loss in business to the tune of $1.4 million between August and April compared to the same eight-month period the year before.
“Sales went to hell and a hand basket,” said Speas.
In the three weeks before the city shut down his businesses, Speas says he was working to pay back his taxes a little each day.
The day before the closure, he says he got a call from the City Treasurer’s Office requesting a payment of no less than $4,000. He says he couldn’t pay the bill. The city changed the locks the next morning.
“I feel bad that they are in that situation, but then they put everyone else in a situation too,” said Ford.
Employees say they are now pinching pennies and staying hopeful that their money will eventually come.
“I believe we will get it,” said Newsome. “Not because of them, just because of the effort of the people.”
10 On Your Side asked Speas if he has a plan to pay employees back.
He responded, “I can’t say anything definite right now because everything is so up in the air.”