Gringo Star Street Bar investors still waiting for return on investment
Gringo Star Street Bar Investors Still Waiting for Return on Investment
When the Gringo Star Street Bar in Tempe, Arizona closed abruptly in mid-January, investors said they were taken by surprise when they learned via Facebook post that the popular nightspot had closed its doors for good.
“I had no idea it closed,” said a Tempe resident at the time, who had invested in the establishment. His sentiment was echoed by other investors, who wished to remain anonymous for fear of financial retribution. The surprise was not that the establishment had closed, but that shareholders had learned of the closure on social media.
As reported January 20, a post on the bar’s Facebook page alerted customers to the closing. There was no explanation given and numerous questions from patrons were left unanswered.
In March, Wright told shareholders that once the books were reconciled, they would receive their return on investment. Months passed without payment.
Now the former managers are in a bitter legal battle with Wright, alleging he misappropriated Gringo Star’s funds. Conversely, Wright is alleging it was not he, but his former managers, who misappropriated funds.
The bar opened in 2013, offering arcade games, food and drinks, dancing, and street art. The 6,500 square foot bar on the corner of 5th Street and Mill Avenue was once home to the Library Bar and Grill, another of Wright’s restaurant bars. Gringo Star’s opening was highly anticipated from both a consumer and investor standpoint. Mill Avenue is popular for its unique taverns and nightlife which draws patrons from nearby Arizona State University.
From amigos to antagonists
Investors said things started going south after a couple of years. They no longer received dividends and found Wright difficult to reach. They allege when they asked questions about their investment or the financial health of the Gringo Star Street Bar, they were either ignored or not given an answer. When they did receive an answer, they allege it wasn’t a favorable one. In fact, two investors said Wright would answer with a “F**k you” if he didn’t like what was being asked of him. Veritas News was provided with a string of text messages allegedly between a shareholder and Wright that does show crude language.
At that time, Wright did provide a profit and loss statement for 2017. The records show total sales of just over $1 million, but with overall sales down 39.4 percent.
Currently faced with arbitration through the American Arbitration Association (AAA), Wright sent a memo to investors stating, “The proforma Operating Budget provided to you prior to your investment projected that operating expenses would total 18.27% of gross sales. Actual operating expenses of Gringo Star from 2013 totaled 18.13% of adjusted gross revenues (i.e., total gross revenues less $1,027,902.00 of drinks and food that (former managers) comped to unknown persons during their management of Gringo Star).”
It continues, “The proforma Opening Budget projected that corporate overhead would total 3.01% of gross sales. From 2013 to 2017 corporate overhead actually totaled 3.03% of adjusted gross sales (gross less [former managers’] giveaways).”
No date has been set for the arbitration.