Wedding woes: Venue files for bankruptcy, cashes deposit

Posted at 6:21 PM, Oct 26, 2016
and last updated 2016-10-26 18:30:54-04

GRAND RAPIDS, Mich. -- Maira Perez's son is getting ready to tie the knot. Her family paid a $1,000 security deposit back in July for the Grand Volute Catering and Event Center in Lowell, but soon learned the venue may not even be open on their wedding day.

"What bride wants to go through this? It's been crazy trying to find another location," Perez said.

She said her soon-to-be daughter-in-law decided to look no further.

"She fell in love with the place, with the staircase and that they had her date," Perez explained.

With Grand Volute lined up for the wedding and reception, she said it looked like everything was coming together for the big day in April 2017.

"July 27th is when we signed the contract and gave the deposit, and we received a letter on August 22nd telling us that they had filed Chapter 11 bankruptcy," Perez explained.

The letter, signed by the owner, states that the event is secured and will go on as planned despite the bankruptcy filing. However, a month later, she got another letter from the business suggesting the event wasn't a guarantee and then learned she wouldn't get a refund.

According to her bank statement, the deposit check wasn’t cleared from her account until Oct. 3. That's more than two months after it was written.

Perez reached out to the FOX 17 Problem Solvers with concern for other potential customers getting blindsided.

She said, "But the point is, if you knew you were not going to guarantee my event, why cash my check?"

The Problem Solvers spoke with Grand Volute's bankruptcy attorney James Oppenhuizen.

"5/3 Bank had a collateral interest in any uncashed checks that were in the possession of Grand Volute at the time," Oppenhuizen explained.

He said the business filed for bankruptcy in order to keep its doors open, to fulfill obligations to existing clients and keep a cash flow. Federal court records show the bankruptcy filing includes a long list of creditors with restrictions on what can be done with any of that cash.

"That essentially handcuffs Grand Volute," Ooppenhuizen said.

Oppenhuizen said organizations like 5/3 Bank and the Small Business Administration (SBA) are secured creditors, so they get first priority on getting refunded. It's not clear if any funds will be left over for individual clients like Perez.

Oppenhuizen said, "The vicious cycle of those contracts and how they interact with the bankruptcy law puts Grand Volute in a position where it can only use the cash that it has in accordance with an order of the court permitting it's use.”

Both sides acknowledge that the business offered Perez's family (and other clients) an opportunity to host an event in 2016 while the business is still open, so the family can get its money's worth. Perez said that's simply a waste. They're already paying for a wedding, and that's where the money should go.

Perez also questioned if the contract is valid because the venue actually changed the date since it was double booked. She said the venue never had her sign another contract.

As for new customers, Oppenhuizen said new customers are being told about the bankruptcy issue.