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Mobtown Beat

Paloma's Crew Goes Bankrupt

Nightclub Ambitions Collapse in Rancor and Debt

By Van Smith | Posted 11/12/2008

When the new Paloma's nightclub opened in 2006 on Woodyear Street in Mount Clare--reinventing its prior incarnation of a few years earlier that operated on Eager Street in Mount Vernon--its owners said it held promise as a hive of creative activity and artistic diversions ("Club Dreams," Mobtown Beat, May 3, 2006,). But even before Paloma's grand opening that spring, the club's unpaid debts had started to mount ("River Runs Dry," Quick and Dirty, Aug. 23, 2006), leading to lawsuits and judgments among the owners ("Penury at Paloma's," Mobtown Beat, Jan. 31, 2007).

Now the parties involved in the defunct club have entered bankruptcy proceedings. The business under which the club operated, Spanky 817 LLC, filed for bankruptcy earlier this year, followed by business partners Jason Crebs in August, and Robert and Martha Fogle in September. On Nov. 4, after a meeting of creditors in the Fogles' bankruptcy case at the U.S. District Court downtown, hard feelings among the erstwhile club owners emerged.

"She's very manipulative and sly," Jason Crebs' mother, Peggy Crebs, said of Martha Fogle, who is also known as River. "And crafty," added Peggy's husband, Richard Crebs. Jason Crebs had helped the Fogles bankroll Paloma's, in addition to another club called Eris that they planned to open on South Monroe Street. Eris never got off the ground.

The Crebs sued for repayment of the money they lent the clubs, and now hold a court judgment against the Fogles. They say a portion of Robert Fogle's earnings as an employee of BGE now goes to them. Still, the ordeal has been a financial setback for the Ellicott City couple, since "a large chunk of our income goes to paying off" money owed to reimburse the cost of the real estate--which the Crebs helped purchase--that was intended to house Eris. The seller of that property, Abdolreza Parvizian, financed the $1.8 million purchase. The property has since gone to foreclosure.

"I'm 64, two years from retirement," said Richard Crebs, "but now that's not going to happen." His wife added that "there's no doubt about it, our lifestyle has really changed" as a result of the fallout from the tanked investment.

The Crebs said they thought they had made a promising decision to put up money for the clubs, but now they feel bamboozled. "We did our research," Richard Crebs said, "and we felt the neighborhood looked good. We gave so much at the beginning, and then we thought, 'OK, we'll give more.' So we got sucked in."

During the proceeding another creditor, James Trujillo, spoke up as well. "The money that I lent you personally, as a friend," Trujillo asked the Fogles, "you have no intention of paying that back?" To which Martha Fogle answered, "I can't."

Trujillo and the Crebs are among dozens of creditors in the Fogles' Chapter 7 bankruptcy case. Though Robert Fogle's annual income from his BGE job tops $100,000, according to the filing, the amount owed to creditors approaches $3 million.

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