{"id":202716,"date":"2026-03-13T09:15:32","date_gmt":"2026-03-13T09:15:32","guid":{"rendered":"https:\/\/www.newsbeep.com\/us-tx\/202716\/"},"modified":"2026-03-13T09:15:32","modified_gmt":"2026-03-13T09:15:32","slug":"why-texas-is-threatening-to-shut-down-a-struggling-san-antonio-restaurant-chain","status":"publish","type":"post","link":"https:\/\/www.newsbeep.com\/us-tx\/202716\/","title":{"rendered":"Why Texas is threatening to shut down a struggling San Antonio restaurant chain"},"content":{"rendered":"

The state of Texas is threatening to shut down struggling Sushi\u00a0Zushi<\/a> for failing to pay taxes, jeopardizing its efforts to find a buyer<\/a> for its three San Antonio restaurant locations.<\/p>\n

Sushi Zushi of Texas LLC and its restaurant businesses emerged from bankruptcy a year ago, but the Texas Comptroller of Public Accounts<\/a> says the businesses are in default for not paying state taxes since confirmation of their reorganization plan.<\/p>\n

Almost $273,000 in taxes\u00a0– including sales and mixed beverage receipt taxes\u00a0–\u00a0have not been paid since last summer, the comptroller said in a court filing this week. As a result, the comptroller “has threatened to shut down the Operating Entities,” Sushi Zushi said. The restaurants owe more than $500,000 combined on unpaid taxes for before and after the bankruptcy filings in 2024, according to the comptroller’s office.<\/p>\n

“If the comptroller shuts down any of the Operating Entities or they are locked out, the restaurant operations will cease, employees will be terminated, and the value of the businesses will be destroyed,” Sushi Zushi added in a recent court filing.<\/p>\n

RELATED: Sushi Zushi pursuing sale of 3 restaurant businesses as they struggle with debt<\/a><\/p>\n

During a bankruptcy court hearing Tuesday afternoon, Sushi\u00a0Zushi asked Chief U.S. Bankruptcy Judge Craig Gargotta<\/a> to reinstate an “automatic stay” that would prevent creditors from pursuing collection efforts while it tries to find a buyer for the restaurants.<\/p>\n

The comptroller objected to the automatic stay.<\/p>\n

Sushi Zushi’s “attempt to reimpose the stay should be denied and the Debtors’ attempts to conduct a sale is not feasible,” the comptroller said in its court filing. “The Debtors are unable to afford day-to-day operations and daily and monthly financial obligations.”<\/p>\n

Gargotta denied Sushi Zushi’s request at the end of the hearing that lasted an hour and 45 minutes, expressing skepticism that Sushi Zushi could quickly find a buyer while the restaurants are not paying taxes, rents, and\u00a0principal and interest on loans. He recalled, while working as a law clerk, the “sage words” of now-retired U.S. Bankruptcy Judge Ronald B. King<\/a>.<\/p>\n

“Bankruptcy’s not about saving employees’ jobs. Bankruptcy’s about paying creditor claims,” Gargotta said. “It’s harsh, but I agree with it.”<\/p>\n

Sushi\u00a0Zushi had counted on an industry rebound following confirmation of the bankruptcy plan, but increased costs, tariffs and declining customer traffic have combined to keep the restaurants from generating enough revenue to meet their obligations.<\/p>\n

With the ongoing struggles, Sushi\u00a0Zushi owner Jason Kemp determined that selling the restaurants was the best option even though that wasn’t part of the reorganization plan.<\/p>\n

The restaurants operate at 999 E. Basse Road in Lincoln Heights, 18790 Stone Oak Parkway and 9867 Interstate 10 in the Colonnade.<\/p>\n

Another setback<\/p>\n

Gargotta’s ruling marked the second setback in less than two weeks for Sushi\u00a0Zushi.<\/p>\n

On Feb. 25, U.S. Bankruptcy Judge Michael Parker<\/a>\u00a0– who was assigned the case but was unable to hear Sushi\u00a0Zushi’s emergency motion to reinstate the automatic stay – denied the businesses’ request to hire\u00a0Transworld Business Advisors of San Antonio North<\/a> and\u00a0agent Walter Szuja<\/a> to market the restaurants.<\/p>\n

Parker called the application to hire Transworld a “circuitous way to get him to approve a modification” of Sushi Zushi’s reorganization plan.<\/p>\n

“If I approve the business broker, now all of a sudden I’ve put my imprimatur on your decision to go out and sell the business when I don’t think the plan provided for that,” Parker told Ron\u00a0Smeberg<\/a>, Sushi Zushi’s lawyer. “So I think you got the cart before the horse.”<\/p>\n

Smeberg responded by filing on March 5 a motion to modify Sushi Zushi of Texas’ reorganization plan. Circumstances warrant a modification because “the assumptions underlying the original plan regarding revenue generation and payments from Operating Entities have proven unattainable,” the motion stated.<\/p>\n

READ MORE: Ailing San Antonio restaurant chain Sushi\u00a0Zushi seeks bankruptcy protection as owners feud<\/a><\/p>\n

Sushi Zushi wants to modify the plan “to provide for a liquidating sale of substantially all \u2026 assets” by Transworld.<\/p>\n

A hearing on the request has not yet been scheduled.<\/p>\n

Whether the comptroller will move to shut down Sushi Zushi in the meantime is unclear. A spokesman for the agency didn’t respond to a request for comment.<\/p>\n

“We’ll just have to see what happens,” Smeberg said after the hearing.<\/p>\n

This article originally published at Why Texas is threatening to shut down a struggling San Antonio restaurant chain<\/a>.<\/p>\n","protected":false},"excerpt":{"rendered":"The state of Texas is threatening to shut down struggling Sushi\u00a0Zushi for failing to pay taxes, jeopardizing its…\n","protected":false},"author":2,"featured_media":202717,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[8],"tags":[79937,79938,79939,79935,354,82,84,83,46519,79934,27,5622,79936],"class_list":["post-202716","post","type-post","status-publish","format-standard","has-post-thumbnail","category-san-antonio","tag-bankruptcy-filings","tag-bankruptcy-judge-craig-gargotta","tag-court-filing","tag-reorganization-plan","tag-restaurants","tag-san-antonio","tag-san-antonio-headlines","tag-san-antonio-news","tag-san-antonio-restaurant","tag-sushi-zushi","tag-texas","tag-texas-comptroller","tag-the-sushi-zushi"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/us-tx\/wp-json\/wp\/v2\/posts\/202716","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/us-tx\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/us-tx\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us-tx\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us-tx\/wp-json\/wp\/v2\/comments?post=202716"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/us-tx\/wp-json\/wp\/v2\/posts\/202716\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us-tx\/wp-json\/wp\/v2\/media\/202717"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/us-tx\/wp-json\/wp\/v2\/media?parent=202716"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/us-tx\/wp-json\/wp\/v2\/categories?post=202716"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/us-tx\/wp-json\/wp\/v2\/tags?post=202716"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}