Hundreds of gift cards have been turned away at a popular Danville restaurant because of a bankruptcy proceeding involving its former owner.
The new operators at Patrick David's restaurant on Sycamore Valley Road have been declining to honor the gift cards since they took over the business in early April.
Gary Mingle, an accountant for Pavlova Passion Inc., said a large number of the restaurant gift cards were handed out in exchange for services and are no longer redeemable.
Mingle said the previous owner, chef Patrick Schoolcraft and his wife, Laura, would give the gift cards to other business owners in exchange for services such as getting their car washed or their hair cut.
He said up to $250,000 worth of these bartered gift cards may have been handed out over the past several years.
Mingle said since the restaurant can't tell which gift cards were purchased and which ones were given out in trade, they have decided not to honor any of them.
"If we accept one gift card, then we have to accept them all," he said.
In addition, Mingle noted, Pavlova Passion Inc. purchased the operational rights of the restaurant from a bank after the Schoolcrafts filed bankruptcy. The assets, however, were not purchased and therefore, Mingle said, Pavlova Passion is not legally required to honor the gift cards.
He noted Costco and Safeway are refunding money for gift cards purchased at those establishments.
Patrick Schoolcraft did not return several phone messages left for him, asking for comment. The regional Better Business Bureau office in Oakland also did not return phone messages.
Schoolcraft still works for Patrick David's as an executive chef. Mingle said he is one of 80 employees the new operators retained. He said they didn't want Schoolcraft to be out of work and they also wanted some continuity to remain with the restaurant.
"We didn't want to just throw people out on the street," Mingle said.
The Schoolcrafts opened the California Pacific Asian cuisine restaurant in the Danville Livery shopping center in 1996. Over the years, they received mostly favorable reviews, including a "Diner's Choice 2010" award from Open Table.
However, the restaurant reportedly ran into financial trouble the past couple years due to the struggling economy.
There are mixed reviews now for the restaurant on yelp.com. At least a half-dozen mention the gift cards, some criticizing the restaurant for not alerting them up front about the problem.
"It's a very unfortunate situation. It has not been easy," said Mingle.