Reorganized Bully's set to emerge from Chapter 11 bankruptcy

Jo Sonner wasn't entirely sure what awaited her when she walked into a conference room packed with attorneys, accountants and restaurant executives a few days before Christmas in 2009.

Her ex-husband, Paul Sonner, had just died suddenly the day before, barely two weeks after he'd filed for Chapter 11 bankruptcy protection for his Bully's Sports Bar & Grill chain.

And while Jo Sonner had played a key role in the creation of Bully's, she had been entirely out of the business since the couple's divorce five years earlier.

The attorneys' message: She needed to take over management of the business. Now.

Today, two and a half years after that shocking meeting, Jo Sonner is within a few short steps of bringing a reorganized Bully's out of the shelter of bankruptcy court.

"If it could be saved, I was going to do it," says Sonner.

The company that's able to stand on its own legs today employs more than 230 people in seven Bully's locations in Reno, Sparks and Carson City as well as four Smokin' locations at which adult patrons can play video poker, order food from a Bully's Sports Bar next door and have an after-dinner cigarette.

In the first mad days after the company's bankruptcy filing, no one was certain that Bully's would survive very long at all.

The company had debts of more than $7.3 million and assets of less than $831,000 when it made the bankruptcy filing.

Then Paul Sonner, the larger-than-life head of the company, died suddenly of a heart attack at age 47.

Alan R. Smith, the Reno attorney who represented the company in its bankruptcy filing, was working furiously to keep the company alive.

Food wholesalers and beer companies - the lifeblood of a restaurant and sports bar business - were demanding cash upfront before they'd make deliveries.

A payroll loomed. Banks were demanding the right paperwork before they'd allow checks to be written on the company's accounts. But the paperwork was dependent on action by state gaming officials, who wouldn't be able to move quickly enough.

Jo Sonner, however, still held State Gaming Control Board approval and she had been named as a successor to the trust established by Paul Sonner that owned all the stock of Bully's. So she got the call.

She had worked side-by-side with her husband to establish the chain in its first location on Mae Anne Avenue 18 years ago, and she had worked in key operational roles until the couple divorced in 2004.

During the subsequent five years, Sonner tried new careers, raised her daughter and paid little attention to Bully's as her half interest in the company was steadily bought out.

"I knew things were not well," she says of the company in the early days of the recession, but she didn't have detailed information about its financial difficulties.

In the first weeks after she returned to the company, Sonner took two big steps. She stabilized relationships with the vendors that were key to company's day-to-day survival, and she gathered the company's longtime management team around her.

Four key managers - JoJo Concepcion, its controller; Jody Clark, the district manager; Mike Thomas, the Marketing and Promotions Manager; and April Seasholtz, purchasing analyst and buyer - became the backbone of the reorganized company.

"They are the reason the company is still here today," she says.

The company negotiated with landlords in bankruptcy court to end leases on a couple of locations while Sonner focused on freshening the restaurants' menu and putting renewed emphasis on service.

"We cater to repeat customers," she says. "We are in neighborhoods. We have to take care of the clientele."

As the Bully's reorganization plan came together this spring, a competing plan was filed with the bankruptcy court by a group including John Klacking of Reno, a longtime restaurant and gaming investor and entrepreneur.

Attorneys representing both plans negotiated hard with City National Bank, the biggest creditor in the Bully's bankruptcy. The bank ultimately voted in favor of the plan proposed by Sonner, in part because she pledged to put more of her own cash into Bully's as part of the reorganization.

Firmly in control of the company today, Sonner says she doesn't have any big plans for expansion. Instead, she's simply happy to be running a stabilized company.

"It pays its bills. It's making money," she says.


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