MAD Corporation, the limited liability corporation that owns and operates the Oyster Bar Grille in Oak Bluffs, filed Chapter 11 bankruptcy January 14, according to federal court records.
The beginning of bankruptcy proceedings came on the same day an auction was scheduled to sell the building at 57 Circuit Avenue, along with all the furniture and fixtures. The filing halted the auction, and all other actions by the creditors.
Under Chapter 11, a business usually proposes a plan of reorganization to keep its business alive and pay creditors over time. Listed as creditors in the bankruptcy filing are Edgartown National Bank, the Internal Revenue Service, the Massachusetts Department of Revenue, the town of Oak Bluffs tax collector, the United States Small Business Administration (SBA), Amerigas, and The Martha’s Vineyard Times.
According to Dukes County land records, MAD Corp. secured three mortgages on the property in March 2006. Edgartown National Bank holds a first mortgage of $817,500, and second mortgage for $654,000. Cape and Island Community Development also holds a mortgage for $674,000, to secure payment for a loan from the Small Business Association (SBA). According to the records, the SBA loan is part of a nationwide program that uses tax dollars to assist small businesses.
All three loans were co-signed by Michael Gillespie and Wyman Shaw, as managers of MAD Corp, LLC.
Signs on the door of the restaurant said it was temporarily closed for renovations. Messages left at the restaurant by a Times reporter were not returned.