Curry Rajah Sant Chatwal Goes Kaput In a Possible $100 Million Bankruptcy Case

Special to India Monitor

NEW YORK – Till the other day, he was famous as the globe trotting curry rajah. When he bought the Beefstake Charlie restaurant chain in New York, the New York Post called him the restaurant rajah. But now the rajah is facing a possible $100 million bankruptcy case.

Over $22 Million Losses For 3 Indian Banks Who Acts Dramatically To Force Him Into Record Involuntary Bankruptcy

Details are just beginning to emerge about how all three Indian Banks, frustrated by years of delaying tactics by Sant Chatwal, have moved with force and ferocity in recent months to move the New York federal court to issue an involuntary bankruptcy for the famed founder of Bombay Palace restaurants in order to expose him to disclosure and questioning. So far, though, give Chatwal the credit for his clout in silencing the Asian Indian press and the media. So far, that is.

In late 1991, State Bank of India got the first judgment against him for a sum of $1.1 million. In quick succession, Bank of Baroda and Bank of India joined the chase, and between three of them, they have obtained at least seven judgments amounting to $7 million and counting. But the banks soon found out that they had collected little more than legal and accounting paper for their files and their respective head offices in India.

So the Indian banks then went after his myriad companies. Over the years, besides the Bombay Palace restaurants, Chatwal had made a name for himself as an innkeeper, hotelier, developer, fund-raiser, and international investor. And presumably he had made name great capital assets to make all of this work. But the quick-witted Sant always stayed one step ahead of them, it not more. He filed elaborate, last minute Chapter 11 bankruptcies for the various partnerships, corporation, and proprietorship, one after another, as soon as they were identified, located and served with collection papers.

Finally fed up, in July of this year, Indrajit Gupta, A.V. Kulkarni, and T.R. Madhavan, acting in unison as representatives of the three Indian banks, and claiming debts of over $22 million fled an involuntary petition of bankruptcy No.95-43003 at U.S. Bankruptcy Court for the Southern district of New York to stop Chatwal’s jovial run-around and to pry open his delay-tactic legal defenses.

State Bank of India claimed $1.4 million, Bank of Baroda clamed $13.4 million, and Bank of India claimed $7.5 million, through attorney Richard S.Last of Dunn & Zuckerman, P.C.

But recent court documents reveal that these banks may have acted far too little, far too late, and to little avail. At this point, it would seem that their combined actions will probably serve little more than to justify their massive multimillion dollar write-off’ s from the precious foreign exchange reserves of India.

IRS, Federal, State and city Tax Authorities Will Be First in Line With Secured Priority Claims Of Almost $30 Million Which Cannot Be Erased

Because according to recently revealed court records, the Internal Revenue Service, the tax authorities of the states of New York, Illinois, Colorado, Florida , Texas and the city of New York in addition to Workmen’s Compensation Board have pending secured, priority claims that could amount to as $30 million. These are bound-for-life-debts that Sant Chatwal cannot erase through bankruptcy voluntarily himself.

Others Banks and Creditors Seeking As Much As $50 Million More From Chatwal And His Companies

To be sure, there are also many other prominent banks in the list of over hundred and ten creditors that has appeared up to now- Meghraj Bank Ltd ( UK). First Union National Bank of Florida, Al Baraka Bancorp (Ca), Bank Leumi, Bank Leumi Trust Company, Crossland Federal Savings Bank. First New York Bank for Business (FDIC), G.E. Capital, Union Chelsea National Bank, and Valley National Bank (NJ), The cumulative debts of these bank and numerous other individuals and corporate creditors against Sant Chatwal could well amount to $50 million. It is entirely possible that many creditors have not still been listed or have failed to file notices of appearance so far. The penalty for willfully making a false statement or willfully concealing property in personal bankruptcy is a fine of up to $500,000 and /or up to five years of imprisonment. Moreover and importantly, if it is found that any of the Sant Chatwal’s loans were obtained through fraud, then the debt would also not be dischargeable through this bankruptcy. Chatwal is represented in this matter by A. Mitchell Greene of Robinson Brog Leinwand Greene Genoves & Gluck, P.C of New York City. Yann Garon, Esq. has been appointed as the interim trustee in this which is assigned to judge Cornelius Blackshear who has been apparently presiding over Chatwal’s other bankruptcies in New York.

A Charmer no doubt but where is the loot?

As we have gone from 80s to the 90s, for at least a decade, we have countless photographs and television images of Chatwal with dignitaries, diplomats, politicians, media stars, community leaders and other assorted up-and-comers and noise makers. In these pictures, Chatwal was dark- eyed, bearded, tall, handsome, and talkative with an easy smile, dark suits and charmed many. He thus wined and dined with the rich and the famous and used his culinary chefs with great craft to raise his profile and credibility in business, political, community media, and entertainment circles. Close sources indicate that his greatest skills as well as his greatest weakness, was his ability to talk and talk and talk. At parties and gatherings, he enjoyed, thrived and pleased himself with his concierge-like, perpetual, cocktail diplomacy as self-appointed host and ambassador of India. Often to reporters he himself admitted as much. His facility for personable loquaciousness obviously left little time to apply his bunnies’ management skills to make money. Inevitably, the big question for everyone involved will be- where is the so-called money, the vast millions that he borrowed with personal guarantee? A multi- pronged hunt has started to search for his declared and undeclared assets, here and abroad whether in his name or not. Predictably and after all is said and done, explanations will come in three varieties- that he was very clever, that he was very stupid, or that he was very unlucky, or some combination of all three depending on what he did, and when he did it. In the coming weeks and months, as more facts develop about this colorful and fascinating community character, we will no doubt collect more and more pieces of the jigsaw puzzle of the man and the empire that was Sant Singh Chatwal.

One thing is for sure, the Chatwal bankruptcy as the bankruptcies go, will be one of the largest ever, and the most widespread of any in the Asian India community- rivaling even the failures of Mohan " Mike" Murjani of Gloria Vanderbilt jean fame. In the next few weeks, this newspaper will keep you posted with complete coverage, even if none other does.

Source: India Monitor Newspaper Sunday 17, December 1995 ( Part -1)
Issue Number:278