Photograph by TorEats

The Last Supper

For years, Buca was the place to go for glitzy, big-ticket nights out. Its founders tried to replicate the experience across the city, fuelled by massive infusions of investment capital and faith that the restaurant industry would never die. Then the music stopped. How did a sprawling empire wind up $35 million in debt?

In May of 2009, a buzzy King Street resto-lounge called Brassaii quietly filed for bankruptcy. The business owed $60,000 to its produce supplier, $70,000 for beer and wine, and $14,000 each to its butcher and fishmonger. The window cleaners got stiffed for nearly $3,000, the Cheese Boutique for $10,000. Brassaii had rung up almost $1 million in debt—a lot of it to small, independent companies. The restaurant’s owners, Peter Tsebelis and Gus Giazitzidis, said they couldn’t pay. They offered 10 cents on the dollar instead.

I know all this because I tried to write about it at the time. While Tsebelis and Giazitzidis were pleading poverty to Brassaii’s suppliers, they seemed to have no end of money or enthusiasm for other ventures. Just two minutes away, on Brant Street north of King, they had opened a 10,000-square-foot steakhouse called Jacobs and Co., with a grand piano lounge and a beef aging room. They announced plans for a gastropub called the Saint on Ossington Avenue. And in an enormous basement space at King and Portland, they were readying to open a new Italian spot they’d had in the works for years. The pair, along with the young chef they’d hired, named Rob Gentile, were planning to call it Buca—the Italian word for hole.

Tsebelis and Giazitzidis were beginning then to transcend their reputation as party boys from Greektown. They’d owned the nightclubby Myth on the Danforth before decamping for King Street, to Brant House and Maro, the sorts of places where you could get $1,000 bottle service with your white chocolate fondue. Their bistro, Brassaii, was a little less rococo: it opened early for breakfast, did brunch on the weekends and kept going until late.

Though business at Brassaii was rarely stellar, the partners had a way of always looking flush with cash. Giazitzidis was the get-it-done bulldog in Louis Vuitton jeans, all elbow grease and shots on the house. Tsebelis was the ideas guy, Mr. Hospitality in a three-piece suit; his bible was the restaurateur Danny Meyer’s best-selling Setting the Table: The Transforming Power of Hospitality in Business. Jasper Viktor, a server and bartender at Brassaii, says they obsessed over providing hospitality instead of everyday service. “Service is what you get at a gas station,” Tsebelis used to say. Another of their favourite refrains: “Always pay yourself first.” Even against that backdrop, however, the Brassaii suppliers who were left $1 million in the lurch declined to talk publicly. I encountered a wall of no comments and strictly off-the-record seething. So the story went away, as these things often do. But in all the years since the Brassaii affair, I’ve never forgotten what one dispirited supplier told me privately: “I’m going to charge them extra the next time around.”

The brain trust behind King Street Co.: chef Rob Gentile flanked by the money guys, Peter Tsebilis (left) and Gus Giazitzidis Photograph by Michelle Siu

Marc Eber was walking in a forest in 2009 when he stumbled across a motherlode of lobster mushrooms. Eber was a northwoods hippie then: scraggly beard, dirty Carhartt coveralls, a not-quite-completed environmental science degree from Trent. He was making a go of things as a biofuel entrepreneur, “sucking oil,” as he puts it, from restaurant deep fryers, converting it to biodiesel and selling it as an eco-friendly automotive fuel.

Eber was also an amateur mycologist, and he recognized those vivid red mushrooms right away. “I was giddy, you know? I was just drunk on picking these things.” In half an hour, he picked 50 pounds. A chef friend of Eber’s soon introduced him to Gentile. Maybe I can make this a business, Eber thought.

Buca was a new type of Italian spot. Its three-year, stop-and-start build-out had transformed a derelict basement boiler room into a soaring post-industrial pleasurescape of crumbling brick, Italian marble and leather-aproned servers, all aglow from a pair of enormous brass chandeliers overhead. As you descended Buca’s grand staircase from King Street you were met by the maître d’, an Amalfi-raised sun god, hair flowing, shirt unbuttoned, who went by Leonardo. As the restaurant critic Joanne Kates put it in her randier-than-usual review at the time, “The servers are Italian charmers—and not too hard on the eyes either.” Buca was sexy and expensive and packed every night. Per Kates: “Italophiles will swoon; carnivores will find that chef Gentile makes sweet love to meat.”

Buca’s chefs, as a rule, were as pedigreed as they come. Gentile and his chef de cuisine, Ryan Campbell, were veterans of the Mark McEwan empire; they had opened the chef’s high-volume One restaurant in the Hazelton Hotel. Another of Gentile’s line cooks had spent three formative years in top kitchens through Italy. His pastry chef, Yasmin Johaadien, arrived at Buca via one of Gordon Ramsay’s Michelin-star London restaurants; her pastry assistant was a Culinary Institute of America grad. It was like dropping by the mechanic’s to pick up your car and finding a Formula One crew balancing the tires.

The Buca kitchen’s specialty from the start was regional Italian dishes wrought from top-drawer ingredients. They stuffed the house caravelle pasta with fava beans and bits of baby octopus, and sold another signature dish called spaghetti al nero di maiale—pig’s blood pasta—made from blood-blackened noodles, rapini and burrata cheese. They butchered whole, pedigreed pigs to make salumi, and served golden little lamb’s brain fritti with salsa verde on the side.

And thanks to Marc Eber’s new mushroom business, Buca’s pizza funghi was a mascarpone-lacquered expanse of wild lobster mushrooms, chanterelles, hedgehogs and maitakes, whatever was in season. Marc’s Mushrooms, as he christened his enterprise, soon sold Buca 40-odd pounds of wild fungi every week.

Yet while the critics swooned and the business took off, the culture in Buca’s kitchen wasn’t as salubrious as its admirers might have assumed. “When you’re in it, you’re like, ‘Oh, I’m going to learn a lot and work my ass off,’ ” says Christopher Terpstra, an Italian-trained cook and butcher who became Buca’s full-time pasta maker. “But there were so many toxic things built into that place.”

The cooks and servers typically bore the brunt. When Buca’s fritti station fell behind, an almost nightly occurrence, one former staffer remembered, Campbell would hiss some variation of “What are you, fucking stupid?” at whichever cook was struggling over the fryer. The standards in that kitchen were extraordinarily high, yet cook after cook I spoke with said the same thing: Gentile refused to provide enough hours or staff to get the work done. And so he and Campbell became masters at berating and belittling from behind customer-friendly smiles—open kitchens will teach that last part fast.

In the kitchen’s tight quarters, Buca’s cooks used the phrase “behind you” as they buzzed through the narrow space. One senior chef used a different phrase. “Inside you,” he’d say as he brushed past


In the year and a half that the Culinary Institute of America–trained pastry cook worked at Buca, she told me, Gentile referred to her as “Stephanie” or “Sweetie”—neither of which are even close to her actual name. (She now works as a web developer.) The short guy on the line was nicknamed “Frodo.” (He soon left the restaurant.) The Tamil guy who worked harder and better than anyone earned the moniker “Tiger.” You know, because of the terrorist group.

In that kitchen’s tight quarters, Buca’s cooks used the phrase “behind you” as they buzzed through the narrow space. One senior chef, however, used a different phrase. “Inside you,” he’d say as he brushed past. Some male chefs laughed, or adopted the phrase themselves, cooks said. Most female chefs didn’t. Chef Inside You, meanwhile, was soon promoted.

The bargain that Buca’s staff made was the same one that fills “prestigious” restaurant kitchens around the world: you soak it all up and sacrifice your time, your dignity, your health, whatever it takes. “Oui chef!” was always the only acceptable reply. In exchange, you had a not completely unlikely chance of a promotion to a better station, a leadership role, a letter of recommendation from your chef for a plum stage in an even more abusive kitchen in Europe, and maybe even your own restaurant someday, where you could pass down everything you’d learned.

The paycheques, meanwhile, didn’t pretend to keep up with the 12- and 14-hour days. Dinner cooks weren’t permitted to clock in until 2 p.m.; if their prep wasn’t ready exactly three hours later, they could expect a stream of abuse. “If you’re trying to prep all those items—there was an orecchiette lobster dish that had 28 mise en place items,” recalled Terpstra. “That’s impossible in that restaurant. So you have all these hotline cooks coming in at 10 a.m., then not clocking in until 2 p.m.”

Everyone got clocked out just 45 minutes after the last dinner order came in. They’d often spend two or more hours deep cleaning and organizing before they were allowed to go home.

Yet not everyone in Buca’s kitchen had to sacrifice that way. While his cooks bunked with roommates, crashed in their parents’ basements and lurched from meagre paycheque to paycheque for the prestige of working for him, Gentile’s base pay and benefits—company Range Rover included—soon topped $185,000. It was an almost unheard-of sum for a restaurant chef in Canada. As a 10 per cent owner in King Street Co., he would have been entitled to share in any profits, too, as well as dividends from the hefty management fees each restaurant sent head office’s way.

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There are two kinds of restaurant owner. The first is the small-time maker: the chef or front-of-house pro or humble entrepreneur who wants to do what they love and earn a decent living, preferably with one or two locations at most. The other kind of restaurateur is the builder at heart—the would-be titans of multi-location brands. The builders yearn for the benefits of expansion: economies of scale, access to capital, the size and resources and leadership openings to attract the best staff. The best builder-at-heart brands become big enough in time to fund their own growth, scaling ad infinitum on arcs of pure success. “The Buca Boys,” as others in the industry soon came to call them, were clearly from the builder camp.

They opened their second Buca location in 2014, a stylish aperitivo and snack spot called Bar Buca, on Portland Street. They got help from a pair of deep-pocketed friends. Steven Muzzo, a scion of the Woodbridge-based construction family, put in $200,000. A seven-foot-tall Italian power forward named Andrea Bargnani put in matching money; he was on a $50-million (U.S.) five-year deal with the Toronto Raptors at the time.

Bargnani and Muzzo added another $1.5 million to help launch Buca Yorkville, which became a homing beacon for the carbon-fibre Amex set. The most popular pizza was the $50 tartufo bianco, buried under fresh white truffles. They sold $260 caviar and crudo platters, and a “raw cyprian sea bass carved tableside” that transformed a $7 tank-raised fish into a $42 I’ll-have-what-they’re-having experience.

Even better, almost, than commercial success, the partners managed through the years to find acclaim. They got it from diners, from food critics (including me, many times over), from their peers and their idols; Italy’s most decorated chefs paraded through the Buca kitchens for VIP events.

For Marc Eber’s mushroom company, King Street’s expansion led to ever-increasing business. He added wild B.C. mushroom varieties to his product line, then morel mushrooms from Northern California and Oregon. Soon, he realized he might as well bring in white truffles, too—all the better to go on Buca Yorkville’s tartufo bianco pies.

Eber admits he didn’t keep a close eye on invoices. When he had a problem, he says, he’d send a text to Gentile: “Yo, you’re a little behind.” Eber’s accounts, he says, were built on relationships. “I like them, they like me. We’ve got each other’s backs.”

Yet as Buca expanded, the payments slowed. “We’d just get into a cycle where periodically I’d look down and see the Buca account and go, ‘Holy shit! Four months!’ ” When Eber could manage to get a cheque, it would be for a fraction of what he was owed. And Gentile, ever helpful in the beginning, had moved up in the King Street world, and the task of chasing down payments often fell to Gentile’s underlings instead. “It went from ‘If there’s an issue, talk to me, I’ll take care of it,’ ” said Eber, “and then it stopped being his role.”

Buca Babies

The ever-expanding roster of King Street Co. restaurants

Jacobs and Co., opened in 2007 Photograph by Daniel Neuhaus
Buca Yorkville, opened in 2014 Photograph via Facebook
Bar Buca, opened in 2014 Photograph by Getty Images
Jamie’s Italian, opened in 2015 Photograph by Hector Vasquez
La Banane, opened in 2017 Photograph by Renée Suen

By the fall of 2015, the Buca restaurants alone were well past due on $300,000 in invoices, plus an additional $100,000 to settle a wine importer’s lawsuit for non-payment. The King Street head office spent almost $70,000 annually on bank overdraft penalties and NSF fees. So, sure, Eber appreciated the personal relationships, but he also began seeing the company’s non-payment for what it was. He wasn’t just Buca’s supplier now, but also what bankruptcy experts call an involuntary lender. “They are essentially taking out loans on me,” said Eber. “Me and the other suppliers are providing zero-interest long-term loans.”

Loans were exactly what King Street’s partners wanted. An expansion opportunity had stumbled into Buca King Street one night in November of 2011. The British TV chef Jamie Oliver came for dinner at the restaurant. “My favourite meal of the year,” he later tweeted, adding, about Gentile, “This Canadian is a humble genius.” Their bromance blossomed into what King Street hoped would be a blockbuster business deal.

In 2014, Gentile and his partners announced that they planned to open 10 Jamie’s Italians. The payoff, they seemed to believe, could eclipse anything they had done to date. While the Buca restaurants and Jacobs and Co. served boutique ingredients and required specialized staff, a chain operation like Jamie’s would be cheaper to run, easier to replicate and, according to the partners’ projections, twice as profitable as their existing restaurants. At their first location in Yorkdale Mall, they anticipated as many as 1,000 customers a day. Within two years of opening, they forecast, that single location would earn $1.45 million on $9 million of sales. A return that rich would put King Street among the luckiest and most smartly managed restaurant operators in the country.

Most new restaurants get their financing from a hodgepodge of sources: family, friends, savings and whatever small loans (read: credit card debt) they can access. Would-be operators with a decent plan can usually qualify for $350,000 or so in government-backed lending, too. More sophisticated restaurant builders often trade shares in their companies for cash or loans. There’s no end of wealthy individuals who love to add a flashy restaurant to their portfolio.

King Street used a mix of those sources until its Jamie’s deal: personal loans (from Tsebelis, Giazitzidis, Muzzo, Bargnani, shareholder Ken Allaham and others) and equity agreements (John Tsoumaris, the nightclub heavy, held around $1.25 million in Jacobs and Co. shares).

Yet there’s a third tier of finance available to the rarest sort of restaurant builders: the ones with proven concepts, solid senior leadership, compelling growth plans and market-beating financials. Those companies—Janet Zuccarini’s Gusto 54 Restaurant Group or Oliver and Bonacini, for instance—can access Tier 1 bank loans and specialized hospitality financing at around six per cent interest or less. That’s exactly what King Street, in an ideal situation, should have been trying for.

But Tier 1 lenders want professional back office management (King Street’s history of past-due bills can’t have helped), tested brands (Jamie’s Italian was still untried here), streamlined ownership (King Street and its restaurants had dozens of small lenders and shareholders) and blemish-free business histories. So with low-interest bank loans off the table, Tsebelis, Giazitzidis and Gentile decided to swim with the sharks.

In November of 2015, the partners and a few of their key investors signed a $14.2-million loan deal with Third Eye Capital Corporation, a Bay Street private equity lender that specializes in what it calls “overlooked or underappreciated” companies undergoing change. The deal itself had 80 pages of terms and covenants. It’s hard to understand why King Street didn’t turn on its heels and run.

The interest rate, for starters, should have put panic in the partners’ hearts: 12 per cent per year. This in an industry where the average profit margin is barely a third of that. That was only the base rate, too. If King Street missed any of its many default-triggering covenants and conditions, the interest spiked to 22 per cent. And in the event a default happened, Third Eye could seize power-of-attorney rights over the company’s decision-making. Never mind that Third Eye’s expertise was in energy, mining and transportation companies, or that King Street was the only restaurant group on its books.

Private equity lenders don’t work the way boring old banks do. The sector’s leaders consider themselves smarter, more nimble, less vulnerable to risk. Yet their bread and butter is the businesses the banks won’t touch, warts and all. These lenders are also largely unregulated—free from much of the usual reporting and oversight that traditional lenders face. And like King Street’s three operating partners, private equity always pays itself first. Or as Arif Bhalwani, Third Eye’s CEO and managing director, boasted earlier this year in a presentation to investors, “You’ll see that shareholders and other lenders will take losses before we ever have to.”

Above and beyond its interest rate, Bhalwani’s company found other ways to sweeten its end of the deal. Third Eye took back $520,000 right off the top of its loan to King Street in deal fees, a kind of thanks-for-doing-business-how-do-you-do. The lenders added a kicker, too, a warrant to purchase up to a fifth of King Street’s shares, which it could flip if a suitor came along and bought the company out.

Tsebelis and his crew signed one other major loan deal: the agreement with Third Eye insisted that King Street reverse its fortunes at the Saint, which had become a bona fide dog. So Gentile reached out to a high-profile young chef named Brandon Olsen, who had most recently been chef de cuisine at Bar Isabel.

Olsen and his then-partner, Sarah Keenlyside, were building a chocolate company called CXBO. Their technicolour, splatter-painted creations had become Instagram hits. They also had an as-yet-unfinanced plan for a restaurant, a young and stylish disco-influenced French bistro of sorts called La Banane. Gentile and King Street could help bring it to life in the Saint space on Ossington. “We have a major fund backing us,” Olsen remembers Gentile saying.

Sarah Keenlyside and Brandon Olsen’s CXBO became a sensation for its colourful chocolates. Then they partnered with King Street, lost the business and accrued a mountain of debt Photograph by Alexa J. Fernando

Olsen and Keenlyside signed CXBO and the rights to Olsen’s fried chicken pop-up, called Brando’s Fried Chicken, over to King Street. In exchange, King Street would arrange and then lend them the funding to build their restaurant, and give the couple a minority share in all three entities. Yet the arrangement came with drawbacks the pair say they didn’t grasp. First off, it transferred lingering debts from the Saint onto La Banane’s books, so their new business would open in a hole not fully of their making. And second, Olsen and Keenlyside wouldn’t get their ownership stake until the new business and King Street each paid off their share of what La Banane owed: $1.1 million of high-cost, high-risk private equity cash.

Almost from the start, things at Jamie’s Italian Yorkdale were not all lovely jubbly. The menu was peppered with duds, and that multi-million-dollar room felt too much like an average, mall-adjacent restaurant chain. The Buca boys had also overestimated Jamie Oliver’s drawing power; in the U.K., his personal brand, and his restaurants, were starting to tank. The King Street partners’ hopes for 1,000 diners a day soon felt like a punchline.

La Banane, by contrast, had the makings of a hit. In 2017, its opening year, the restaurant debuted near the top of the best restaurant lists. Olsen’s Eurobass en croute—a whole fish baked in a latticework crust—was a constant presence in magazine pages and Instagram feeds. The soundtrack mixed the pop of grower Champagne corks with the driving beat and vamp of Pompidou-era disco, the cracking of crab legs from La Banane’s raw bar and the almost never-ending laughter of beautiful people. Almost.

La Banane suffered from persistent issues—some of which had plagued the Saint before Olsen and Keenlyside came along. The room itself had just one small bank of windows and no outside space, so filling the place on hot summer nights could be a struggle. La Banane didn’t have a private dining area, either, and so was constantly turning away large parties. And thanks to the nightclub upstairs, the ceiling thumped and flexed on Fridays and Saturdays. It was killing the vibe.

Yet La Banane had financial targets to hit: it needed $300,000 minimum in top-line revenue every four weeks if it hoped to break even, and $30,000 monthly to pay the debt and interest to Third Eye. Another five per cent of La Banane’s gross revenues went to Tsebelis, Gentile and Giazitzidis’s management arm.

At Jacobs and Co., business kept rolling, but the steakhouse’s suppliers were growing surly about payment delays. The service staff nearly ran out of forks one night after their cutlery vendor cut them off


In exchange for those fees, King Street was supposed to be La Banane’s back office, managing its bank accounts (Olsen and Keenlyside didn’t have signing authority), paying the debt to Third Eye and keeping up with invoices, among other things. At CXBO, which she oversaw, Keenlyside ran into problems almost straight away. “The first few months was the first time I went, ‘Wow, what the fuck is happening?’ ” she said. The firm’s suppliers started calling her in distress. The invoices they’d sent were four months past due. So Keenlyside dispatched a staffer to King Street headquarters. The staffer said she found the chocolate company’s unpaid invoices jumbled in a plastic shopping bag under one of the accountants’ desks.

At Jacobs, the company’s cash-spinning steakhouse, business kept rolling on as well as ever. They routinely sold out of $1,200 Wagyu rib-eyes, and the sommeliers poured Domaine de la Romanée-Conti by the $400 glass. But the steakhouse’s suppliers were growing surly about King Street’s payment delays. The service staff nearly ran out of forks one night after their cutlery vendor cut them off. That can be hard to explain to the table that’s sitting over a steak as pricey as a flight to Japan. At Buca Yorkville, wine vendors routinely barred the place from their most in-demand bottles for lack of payment.

It was increasingly difficult, meanwhile, not to spot the changes in the Buca kitchens’ staff. The turnover was noticeably high, the talent spread thin. Buca had a reputation among cooks, after all, as a brutal place to work. It doesn’t take long in a booming restaurant labour market for that kind of trouble to find its way onto the plates.

Marc Eber, the mushroom guy, would have loved to bail on King Street. But he worried he’d never be able to collect if he did. So he spent chunks of his days on the phone with the company’s accountants: pleading, shouting, hoping for sympathy. (Other suppliers had far less patience. Hooked, the fishmonger, sued the company for $118,000 in long-past-due payments.) Finally, in March of 2017, Eber got a meeting with Giazitzidis.

“Gus was extremely charming and disarming, and he wants to take care of you,” Eber recalled. “It’s all the language and intonation of, ‘I hear you.’ Apologizing and not denying, just assuring.” Soon, the company fell behind again.

At that point, King Street had bigger problems than paying for mushrooms. Not six months after it signed its loan deal with Third Eye, the company started defaulting. Tsebelis, Giazitzidis and Gentile quickly went back for a $390,000 bump. Third Eye charged a nearly 20 per cent “amendment fee” right off the top, keeping $75,000 of that loan for itself.

The partners went back a dozen times in the ensuing years, for all manner of reasons: to fund new places, buy out shareholders and repay suppliers. They borrowed more and more from Third Eye, even, to catch up on tax arrears and cover overdue Third Eye loan payments—the finance-world version of drinking yourself silly in the morning to cure the hangover from the night before.

Even Olsen and Keenlyside went back for more money, to buy out the nightclub upstairs and transform it into a wine bar and private dining space. “Yes, we saw that things were not going right, but we were—we didn’t know how fucked up it was, but we also really believed that we had a magic recipe,” Keenlyside recalled.

By this point in King Street’s troubles, someone should have hit reset. “A lender should have noted, ‘Hey guys, you’re having some challenges with some of your core stores here, I think it’s time to pump the brakes a bit, focus on operations,’ ” says Jacob Mancini, whose restaurant finance group at the Canadian Western Bank funds a who’s-who of top Canadian hospitality brands.

Instead, with Third Eye’s backing, the partners signed a dizzying array of restaurant, retail and kitchen deals: in the Park Hyatt Hotel (where they planned a Japanese restaurant) and the Globe and Mail building (a central commissary and restaurant), at One Bloor West (multiple full-service restaurants, plus an upscale café and event space), at CIBC Square and Brookfield Place (one restaurant apiece), at Yonge and St. Clair (Cucina Buca), Yonge and Eglinton (Bar Buca), and north of the city, in a condo development in Vaughan (Buca and Bar Buca). All told, they signed new leases for some 100,000 square feet of prime commercial real estate—enough space to fit Buca Yorkville nearly 30 times.

“How on earth would they have the comfort that they would be able to open those locations?” asks Mancini, the financier. “When they weren’t making payments?”

Upstairs from La Banane, Olsen and Keenlyside were learning the hard way that the company didn’t have the money or the wherewithal to start anything new. For nearly a year after they signed for their new wine bar, called Man Ray, the project couldn’t get the required liquor licence, Olsen says. King Street headquarters—the supposed experts at this stuff—wasn’t much help. “At this point, we’re realizing that we’re the lowest restaurant on the totem pole,” says Olsen. “But we’re paying interest on this fucking loan.”

As for the status of that loan or how much they still owed, they didn’t really know. King Street gave them incomplete access to La Banane’s financial records. “I just don’t understand where it all goes,” Olsen says. Construction on Man Ray proceeded in fits and starts, largely thanks to lack-of-payment issues. Olsen was coming to his wit’s end. Finally, in October of 2019, the chef got an email from King Street’s CFO, Daryl Pace, asking him to sign a document he couldn’t understand.

King Street, by this point, was $22 million in debt to Third Eye. Its defaults filled a third of a page of the loan amendments: “failure to service the monthly interest obligations,” “failure to deliver annual reporting,” “failure to comply with min. [earnings] covenant…” The problems piled on and on.

Olsen called a meeting with Pace, Giazitzidis and Tsebelis. The conversation that followed, a conversation I managed to get a recording of, is almost surreal.

Olsen: “I just want to know what this document’s all about, because I got this document and I’m expected to sign it, and my lawyer’s saying not to sign it.”

Pace: “So, Third Eye sent out a whack of documents last week—”

Tsebelis (interrupting): “The one that I signed?”

Pace: “The one you signed.”

Tsebelis: “That I didn’t read?”

Pace: “What’s that?”

Tsebelis: (chuckling) “The one that I didn’t read. And signed.”

Pace begins to explain. That document, he says, was an amendment to the credit agreement—an acknowledgment, as he puts it, “that certain things had been…missed.” King Street, Pace informs Olsen, had skipped the mandatory monthly payments on the La Banane loan. In fact, head office had been behind on its repayments for the previous five months.

Olsen, exasperated, explains how stressed and exhausted and adrift he’s been feeling: from lack of information about his business and financials, from the stalled construction on Man Ray, from lack of head office support. Olsen then hands a letter across the table and makes an announcement: though he knows his decision will cost him the restaurant and chocolate company, he plans to walk away from the partnership in 90 days. The chef’s departure could be disastrous for King Street, possibly triggering a cascading set of repayment calls. Yet instead of proposing some kind of solution, Pace scrapes back his chair, announcing to the chef as he storms out of the meeting, “I think you’re being a little bit of a bitch, okay?”

Tsebelis and Giazitzidis try a different tack: flattery and accommodation, followed closely by carefully constructed threats. “If we take this resignation now, we’ve got to tell everybody, got to tell Third Eye,” Tsebelis tells Olsen. “It’s just going to—the world will implode.”

“You’re going to have somebody like Third Eye chasing you down, making your life fucking miserable,” Tsebelis continues. “I’m not saying they will, but I can’t see how they wouldn’t. It’s not like you’re walking away from nothing. They’re owed money.”

Olsen eventually comes around. And for a while, he says, the relationship improved. The construction on Man Ray picked up steam. “It seemed like, ‘Wow, this is what a partnership is!’ ” Olsen says. “Then I started getting phone calls. From the electrician: ‘You owe me $40,000 or I’m not going to sign off on the permit.’ ” Their painter and their mirror guy wouldn’t come in. Olsen ran his personal Amex card to $170,000 to take care of whatever bills he could. Finally, in February of last year, he and Keenlyside decided to paint the Man Ray room themselves. Anything to get the place open to paying guests. They didn’t do it for money, of course—they’d long ago abandoned hope of that. And you wouldn’t say they were doing it for the experience or prestige. But in the face of seemingly insurmountable obstacles, they showed pride, grit and a self-sacrificial attitude. In a lot of ways, they were ideal King Street employees at last.

On March 16 last year, Ontario’s chief medical officer of health advised restaurants in the province to cease operations. King Street, shuttered by Covid, put more than 450 of its employees out of work. The few who remained mostly turned their efforts to takeout and delivery. Revenues flatlined, said the company, dropping by 98 per cent. The expansion spree, just barely sustainable in boom times, could only come crashing to its end.

King Street’s debt, including accrued interest, was $34.9 million; just two weeks before the shutdown, Tsebelis, Gentile and Giazitzidis had gone to Third Eye for yet another re-up, $4.6 million this time. Yet King Street’s obligations to its small suppliers were also mounting. By the fall of 2020, King Street owed $105,000 to the Royal Produce Company and $220,000 to its Jacobs and Co. landlords. It owed $345,000 to Woodward Meats and $46,000 to Diana’s Seafood. Marc Eber, the ever-faithful mushroom guy, was out $97,000.

There were outstanding invoices from plumbers and electricians, wine sellers and brewers, furniture sellers and marble suppliers, plus a dozen of Tsebelis and Giazitzidis’s jilted Brassaii suppliers now losing on the company a second time around.

In the company’s public statements, Tsebelis never mentioned King Street’s long-held debts or string of defaults, its festering Jamie’s Italian bet or its building and lease-signing spree. Instead, he laid the blame for the reckoning on Covid-19. “Alongside the entire hospitality sector, the pandemic has put us in an extremely difficult situation that was beyond our control,” he said.

Third Eye was among the first of King Street’s major creditors to blink after Covid hit. In April, the private equity lender called its loans. They would be due in full, it said, as of the end of June, as if the partners could just find that kind of money lying around.

The landlords struck in May, locking King Street out of both Jamie’s Italians, out of Buca Bay in Brookfield Place, and out of Bar Buca at Yonge and Eglinton. Then the landlords’ lawsuits came: $16.53 million in claims from OMERS Realty Management and from a subsidiary of Brookfield Properties.

At Jacobs, a server went public with sexual harassment allegations that, she claimed, the restaurant’s management had failed to address. She was preparing to file a human rights complaint. The company got hit with a series of supplier suits in small claims court. Even Jamie Oliver took a swing at King Street when his Jamie’s Italian HQ filed suit.

Since the early 1930s, businesses in just these sorts of situations have turned to a federal law called the Companies’ Creditor Arrangement Act to ease their troubles. The restructuring legislation, which favours large, secured creditors over smaller suppliers, doesn’t deal with who or what is at fault for a firm’s financial problems. It is also an ideal shield against financial pursuers and lawsuits. Yet King Street’s largest creditor, Third Eye, was already inside the barricades, running the restructuring process on the company’s behalf. So King Street’s proposal, soon affirmed by the court, served mostly to protect whatever value was still left in the company—its remaining restaurants, primarily—from everybody else. The upshot: Third Eye and a handful of other secured creditors were entitled to recoup what money they could before King Street’s hundreds of involuntary creditors would ever see a single cent.

Tsebelis, responding via email this summer to my request for an interview, had nothing but gushing praise for Third Eye; other, presumably less enlightened companies had let his restaurant group down. “The pandemic not only devastated our business but resulted in disappointing desertions by an unexpected handful of landlords and other so-called partners,” he wrote.

Bhalwani, of Third Eye, also deflected blame for the creditor protection manoeuvring. The proceedings, he wrote, were “precipitated by impatient and unsympathetic landlords and contractors.” In fact, Third Eye, he implied, was the hero of this story. By continuing to provide King Street with capital and its “business expertise,” he said, “we have both preserved and created hundreds of jobs and are helping foster the economic vitality of our city.” (Neither Tsebelis, Giazitzidis nor Bhalwani agreed to be interviewed for this article.)

All of which is hard to square with what actually went down. Third Eye Capital, the $2.5-billion private equity fund, now effectively owns what’s left of King Street—minus all those lawsuits and the Jamie’s Italian albatrosses and the unpaid debts to several hundred suppliers. It got out of $2 million in unpaid invoices at Cucina Buca alone, from more than 50 trades and local suppliers, King Street’s so-called partners, who had provided them in good faith.

The remnants of King Street no longer include Rob Gentile. He parted ways with King Street in the middle of last year. For whatever issues the chef brought to his kitchens, Buca without Gentile isn’t remotely the same company from a culinary standpoint. I asked him repeatedly to comment for this article. “I was really hoping to move on,” Gentile replied.

Brandon Olsen finally managed to quit after King Street refused him access to La Banane’s detailed accounts. He and Keenlyside lost the chocolate company they’d created, plus the restaurant they’d worked for years to build, as well as Olsen’s fried chicken brand. “It’s a curse because we lost everything, but it’s a blessing not to be associated with that group,” the chef says.

Tsebilis and Giazitzidis, who put up personal guarantees to get all those Third Eye loans, are still working at the remade restaurant company, under what kind of deal I have no idea.

Marc Eber supplied Buca with mushrooms for years. Initially, the relationship was good. The company fell behind on payments, eventually owing Eber $97,000 Photograph by Daniel Neuhaus

Eber, the mushroom guy, broke down sobbing on the phone when I first spoke with him this past spring. “The only way I see any money is if they come out of this unscathed and are able to restructure and keep me in there and say, like, ‘Cool, here’s your money,’ ” he said.

Said one supplier whose company sold to King Street: “To go to your meat guy and your mushroom guy and your wine suppliers, all these people, and use their good will with no real intention of paying them any time soon—that’s what really burned people. Not looking at suppliers as partners in your business but as people you can use to get ahead.”

Yet not every business owner King Street stiffed is angry about what happened. “I can cry about ‘Buca, Buca, Buca,’ but in the end, you know what? I sold them so much wine, I made my money,” says Sasa Mladjen, whose import company, NMTG Inc., lost $112,000 in the King Street fiasco—on top of the more than $30,000 it lost in the Brassaii affair. Mladjen’s greatest regret? “I lost my future business. That’s the worst thing, right? Because they should have opened another six restaurants,” he says.

On a sultry Wednesday night this past August, I went back to Buca King Street for dinner on its patio. It had been reopening slowly since the lockdown lifted, outdoors only and on a skeleton staff. Our waiter, Dimitri, was kind and genuine and helpful with the wine list. We had a couple of salads and a very good pasta and shared a pizza funghi. It was dressed with chanterelle mushrooms that Eber had started supplying the company again.

Many of the restaurant industry’s best and brightest are fleeing the business. They’re choosing web design and retail, social work and school, wine selling, day trading, food styling, the trades and other more stable and rewarding lines of work


Eber, in the last few months, has been trying to get over all the money he lost. The world, he says, is angry enough, and King Street is now willing to pay him COD. Besides, he says, he really likes the new chef. “He’s great. I love that guy,” Eber told me, laughing. “That’s the tricky part. I have a lot of relationships with chefs.”

Though I admire his heart and faith in people, I can’t bring myself to share in Eber’s optimism—about the former King Street specifically or the restaurant industry as a whole. Something fundamental has shifted in the last year and a half. After years of investing in an exploitative promise, the dining industry’s best and brightest workers, the cooks and floor staff whose poorly remunerated passion subsidized our luxury dinners, are fleeing the business. They’re choosing web design and retail, social work and school, wine selling, day trading, food styling, paralegal education, the building trades and innumerable other more stable and rewarding lines of work. Even Olsen, so recently at the top of the city restaurant ecosystem, is stepping away from the industry. He’s contemplating a future in creative design, he says—carpentry, welding or maybe even sculpture.

After dinner on Buca’s patio that night, I wandered into the old dining room, looking out on the place from the top of the stairs. The kitchen was nearly empty, the chairs up on tables. A couple of wan-looking prosciutti hung on display in the glass-walled salumi room. But, even empty, that old Buca space was glorious: the dark leather banquettes and time-worn marble; the high, crumbling walls that always put me in mind of some ancient aqueduct; those enormous, bare-filament chandeliers overhead that bathed it all in an irrepressibly romantic glow. I allowed myself for one last time to remember what Buca and King Street and its type of restaurant once meant, when the cooking and the hospitality and the feeling a place gave you were all that mattered, when nobody bothered to know or care about what happened every day behind the scenes.

This story appears in the October 2021 issue of Toronto Life magazine. To subscribe for just $29.95 a year, click here.