Bob McMahon has filed for Chapter 11 bankruptcy protection for one of his companies, postponing a planned auction of the eight-building complex he owns at North Swan and East Fort Lowell roads.
The bankruptcy filing last week for McMahon Properties LLC will give the Tucson restauranteur time to restructure his debts while continuing day-to-day operations.
McMahon listed on bankruptcy forms estimated debts between $1 million and $10 million to various creditors. The largest is Alliance Bank of Arizona, which loaned McMahon Properties LLC $6 million to buy the five-acre parcel.
In November, McMahon said he owed the bank $5.2 million.
Other debts include: $82,355 in back taxes owed to Pima County, $9,194 to CB Richard Ellis, $8,469 to The Sage Tax Group and $5,090 to Watson Refrigeration.
An attorney representing McMahon, Scott Gibson, said the bankruptcy filing has postponed the planned auction of property at North Swan and East Fort Lowell roads.
The property owned by McMahon Properties LLC has several commercial tenants, most notably McMahon’s Prime Steakhouse and the offices of Metro Restaurants, which manages McMahon’s restaurant properties in the Tucson and Green Valley areas.
Reached by phone, McMahon said the decision was the best option for his business as he looks for new investors.
"It was the best course of action," he said.
The Chapter 11 filing does not effect the popular steakhouse bearing the well-known Tucson restauranteur's name as it is not part of McMahon Properties LLC.
The steakhouse is not closing, McMahon said again on Thursday.
The award-winning steakhouse is just one of several tenants on the five-acre property that has a lease with McMahon Properties LLC, he said.
A number of other tenants on the property are health-related, part of a nearby medical plaza.
McMahon has scaled back the size of Metro Restaurants over the last few years, closing several high-profile restaurants.
In the early 2000s, McMahon was at one point running nine restaurants.
Currently, Metro Restaurants operates five restaurants in Southern Arizona as well as a cigar bar inside McMahon's Prime Steakhouse.