Restaurant News & Reviews

Fights, debt and a $23,000 tab: El Rey’s legal problems might be too much to rebound from

Heavy is the head that wears the crown. And for Kenny Thomas, it might have been too much to bear.

El Rey, the Mexican restaurant and bar co-owned by Thomas at 723 K St., was closed last week while its owners attempt to rebrand it from a pseudo-nightclub back to the sports bar it was when it opened. Meanwhile, the ex-Kings power forward faces legal accusations that he threatened managers, fought security and ran up a $23,000 food and drink tab — claims that allegedly led to his former co-owners asking him not to appear at El Rey without their permission for the entire 2017-18 NBA season.

Details of former El Rey minority owners Trevor Shults, Robert Simpson, Randy Clyde and Thomas Heenan’s civil lawsuit against Thomas and El Rey’s LLC in Sacramento County Superior Court were brought to light last week by the Sacramento Business Journal. They come weeks after building owner Sequoia Investments LP demanded roughly $51,000 in unpaid rent and filed its own lawsuit in hopes of evicting El Rey.

A new co-owner, North Carolina attorney and longtime Kenny Thomas Foundation leader Ken Harris, said Friday afternoon El Rey would reopen Saturday as “7th and K.” The menu and interior design will mostly remain the same, but 7th and K will host more sports personalities than El Rey and close at midnight instead of 1:30 a.m. on weekends, Harris said. A banquet area in the back is intended for art exhibitions and private events.

Thomas owned half of El Rey when it opened Aug. 31, 2016, a month before Paul McCartney became the first star to perform at Golden 1 Center. Thomas, Shults (20 percent ownership), Simpson (15 percent), Clyde (10 percent) and Heenan (5 percent) comprised TSCS, LLC, El Rey’s ownership company. Shults owns or co-owns BarWest, Crawdads on the River, Malt & Mash and Vanguard 1415 nightclub, while Simpson owns Social Nightclub and Republic Bar & Grill. Clyde and Heenan, both minority investors, were added as plaintiffs in the case Thursday.

Despite middling food reviews, El Rey caught people headed to and from Kings games and concerts. As competitive restaurants emerged in Downtown Commons and on the 700 block of K Street, though, customers went elsewhere. By the end of the Kings’ first season in Golden 1 Center, El Rey faced hundreds of thousands of dollars of debt and was having trouble paying its employees, according to emails between TSCS LLC and Elk Grove-based Elite Accounting Solutions.

And the face of the restaurant wasn’t helping matters, his co-owners claimed. In May 2017, a female manager was trying to close down for the night when Thomas belligerently accosted her, yelling profanity and poking her hard enough to cause bruising to her chest, according to a declaration filed last Monday by the plaintiffs’ attorney. The 5-foot-3 manager took to hiding in El Rey’s restroom when Thomas came back on future visits out of fear of the 6-foot-7 owner, the declaration read.

Two months later, Thomas spent his birthday drinking heavily at El Rey with friends, according to the lawsuit. When security tried to close the restaurant down for the night, Thomas allegedly began screaming at one guard in particular and charged him, only to be restrained by other guards and ushered out the back door.

By September 2017, Shults, Simpson, Heenan and Clyde wanted out of TSCS. An email from then-TSCS attorney Steve Benjamin explained why: El Rey owed vendors $320,000, and Thomas himself had reportedly run up a $23,000 bar tab over the last year, about 1 percent of the restaurant’s gross revenue. Benjamin told Thomas he wasn’t welcome at El Rey without Shults’ or Simpson’s prior consent during the 2017-18 NBA season, and that the other owners would pursue a formal restraining order if there were any more problems.

“TSCS, LLC is fortunate [so far] not to have received a charge of discrimination, harassment or retaliation from any employee or a summons and complaint arising from one or more of the incidents,” Benjamin’s email read. “This good fortune is unlikely to continue indefinitely should you continue to appear at El Rey and engage in altercations with customers and/or employees.”

Thomas, meanwhile, filed a court declaration accusing Shults of diverting El Rey’s money and equipment into his other restaurants, which Shults later denied. The NBA veteran had no restaurant experience prior to opening El Rey and planned to leave its management up to his partners but bought them out because he was worried he’d lose his investment, he said in the declaration.

El Rey’s sales slowed in the summer after the Kings’ 2016-17 season and didn’t rise back up to the previous season’s levels even after basketball resumed, according to Shults’ emails to other investors at the time. Thomas agreed to buy out his former co-owners for about $148,000 on Jan. 16, 2018, but withheld the money after learning El Rey had been paying neighboring Malt and Mash’s garbage bills and writing checks to BarWest, he said in the declaration.

“I feel I have been defrauded by Plaintiffs Shults and Simpson in connection with their withdrawal as members of TSCS,” Thomas’ declaration read. “They did not make a complete disclosure to me because to do so would have required them to admit their improper transactions using TSCS funds ... I believe that when all the damages to TSCS are computed, they will exceed any note balances due and owing.”

Thomas chose to let Harris speak for TSCS rather than comment himself. TSCS attorney Vince McLaughlin did not respond to a request for comment.

Thomas, 41, averaged 9.3 points per game and 6.9 rebounds per game over 11 seasons with the Kings, Houston Rockets and Philadelphia 76ers. He played in Sacramento from 2005-10.

Benjamin later sued El Rey for $30,000 in unpaid legal fees. A judge ruled in his favor last month.

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Benjy Egel covers local restaurants and bars for The Sacramento Bee as well as general breaking news and investigative projects. A Sacramento native, he previously covered business for the Amarillo Globe-News in Texas.