The company that owns the Pink Pony in Brookhaven has filed for chapter 11 bankruptcy following the city’s recent decision to cut back the strip club’s hours. But lawsuits filed by former dancers over wage and hours at the club are also playing a role in the bankruptcy filing.
Dennis Williams, the CFO of Trop Inc., the company that owns the Pink Pony, said the club remains open and the bankruptcy filing allows Trop Inc. to “reorganize our structure.”
“We feel it’s necessary to do this to continue operating and to give us some relief,” Williams said.
The Pink Pony has been losing nearly $30,000 a week since the city of Brookhaven began about two months ago enforcing its 2 a.m. last call on weekdays and midnight last call on Sundays at all clubs in the city, Williams said. The strip club had been staying open until 4 a.m. seven days a week before the new hours were enforced.
“This takes a bite out for everyone,” Williams said, saying bartenders and entertainers are also losing tip money due to the shortened hours.
But the Pink Pony has also been “besieged” by lawsuits from former entertainers over wage and hour complaints, he said. Filing chapter 11 bankruptcy “gives us some relief from the attacking litigation,” Williams said.
“We’ve lost a lot of business [because of shortened hours] and we are under siege from lawsuits,” he said. “With the loss of revenue and the costly litigation, [bankruptcy] is a way to reorganize our corporate structure.”
The bankruptcy court filing shows Trop Inc. owes more than $1 million to a Covington, La., bank and more than $62,000 to Atlanta attorney Ainsworth Dudley. Thousands more are owed to what appears to be former employees.
Since 2014, the Pink Pony has been operating under an exit agreement with the city of Brookhaven. That exit agreement mandates the Pink Pony pay the city $225,000 a year to cover such resources as police costs. The agreement ends Dec. 31, 2020.
As part of that agreement, the Pink Pony was also allowed to operate until 4 a.m. But this year the city revised its alcohol ordinance, including rolling back last call to 2 a.m.
When black-owned clubs sued the city alleging the ordinance was discriminatory because it allowed the white-owned Pink Pony to stay open until 4 a.m., a federal judge ruled the city needed to enforce the same hours for all of its clubs.
Rather than allowing all clubs remain open until 3 or 4 a.m. as the other clubs wanted, the city began enforcing the 2 a.m. last call.