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At 1 p.m. on May 8 — prime time for lunch — a peek through the windows at beleaguered Valentina's Tex Mex BBQ in Buda revealed a dining room devoid of people, with chairs stacked on top of tables. Two notes taped to the door informed passersby of default on the restaurant's lease agreement.
In other words, the target reopening date set by husband-wife owners Miguel and Modesty Vidal didn't come off as planned, and it's now unclear when the 6,000-square-foot restaurant will be back in business. The Vidals set that date when they announced that the business at Buda Mill & Grain Co. at 308 S. Main St. abruptly closed April 25.
Since then, the Austin Business Journal confirmed that the business is being sold. That was followed by the discovery that its owners owed at least $2.3 million to various parties, including its landlord, the state of Texas, contractors and the city of Buda. The restaurant also is under investigation by the U.S. Department of Labor, and it has come under fire from former employees with many allegations, including late or nonexistent payments and poor treatment and working conditions.
Johann Moonesinghe, the CEO of Austin-based InKind, previously confirmed to the ABJ that his company is working to buy the restaurant. InKind, Valentina's senior creditor, is owed more than $1.5 million, he previously said.
On April 26, an entity tied to InKind called RDM V Buda LLC officially incorporated, according to documents filed with the Texas Secretary of State. Moonesinghe is listed as the governing person in the filing, and the address for the LLC is the same as Valentina's restaurant.
Reached by the ABJ on May 7, a representative for InKind declined to comment on the status of the sale or on a potential timeline for reopening. The Vidals have also not responded to multiple requests for comment, and multiple attempts to reach the restaurant on May 8 were unsuccessful.
InKind is a restaurant finance company that is among the largest in the country and has funded over 600 restaurants this year. The business also has a consumer-facing front that offers diners discounted meals. It has invested in some Austin staples, including Rosen's Bagel Co., Sushi by Scratch, Two Hands Hospitality and Paperboy. It also owns and operates restaurants such as Ember Kitchen and The Guest House in Austin.
Valentina's appears to be the second restaurant that InKind has been working to acquire in recent weeks. On April 15, InKind bought Etta Collective in Chicago for $4 million after the restaurant filed for Chapter 11 bankruptcy in multiple states earlier in this year, according to Eater Chicago. Bankruptcy filings showed Etta owed InKind $1.8 million.
Valentina's rise, which went from an upstart food truck in South Austin to a spot on Texas Monthly's "50 Best BBQ Joints List" to a brick-and-mortar in Buda, all came crashing down last month when it abruptly closed.
An ABJ investigation detailed a host of issues with the Vidals' fiscal and business management. The company's debt of at least $2.3 million includes more than $47,000 owed to the state of Texas in unpaid taxes, more than $20,000 owed to at least one contractor and $285,000 in loans from the city of Buda, which helped the Vidals open the restaurant. It's a staggering amount for a restaurant that had lines out the door and was said to be on track for $3 million in revenue this year — although that figure is down from $4.5 million at the food truck and less than projections of $10 million at the restaurant.
The ABJ's reporting also revealed a Department of Labor investigation into the company, and employees corroborated that investigators visited the restaurant last year. That was around the time the business faced allegations of tip stealing, and the Texas Workforce Commission confirmed it received at least one wage claim. The potential ramifications for the business are unknown.
Former employees also detailed a pattern of alleged workplace malfeasance that dates back to when the restaurant operated out of a food trailer in South Austin. The issues include a history of late, sporadic or nonexistent payments, and tips or payments being made in cash or through digital payment networks instead of checks. They also described a demanding workplace culture centered around a staff primarily made up of teenagers.
The Vidals acknowledged issues when they announced the closure in an April 25 social media post.
"We’ve been at this for a long time, and we work really hard, but this last year has been harder than ever," the Vidals said in the post. "For us, scaling our business from 600 sq. ft. to 6,000 sq. ft. has proven more than we can manage, and we recognize and admit to the many issues and challenges Valentina’s has had since we’ve moved. We can no longer continue to give our loyal customers sub par customer service and food."
Moonesinghe previously told the ABJ that because his company wasn't the restaurant's owners or operators, it wasn't aware of several of the issues with the business. But it is aiming to make sure that everyone, including employees, gets paid, he said. If the sale goes through, the Vidals would be involved as employees.
"Miguel is an incredibly talented chef and most people who’ve been to Valentina’s including Aaron Franklin say it’s their favorite barbecue," he said previously in a statement. "Ultimately though, producing mouthwatering food is not enough when running a restaurant."
