Issue:  Vol. 47 / No. 49 / 7 December 2017
 

Court dismisses Pendulum lawsuit

NEWS


m.bajko@ebar.com

Bar owner Les Natali has retained ownership of the Pendulum bar in the Castro and hopes to reopen it by June. Photo: Rick Gerharter
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A San Francisco Superior Court judge dismissed a lawsuit over ownership of the Pendulum last month after Castro bar owner Les Natali and former Hortica owner John MacNeil mediated a settlement out of court.

Under the agreement, Natali will maintain majority ownership of the bar, long known to be a popular hangout with African Americans, and MacNeil will buy from Natali the liquor license to the old Detour, which Natali acquired four years ago in another legally contested sale only to shutter the bar last year when the lease expired.

MacNeil is currently scouting for a location in the Castro, as well as in South of Market, for an existing space he can turn into a new bar. He has until November to secure a location and ask the state Department of Alcohol and Beverage Control to transfer the license from Natali's name to his. Neither man would reveal the sale price for the Detour license. MacNeil will not pay for it until a location is found.

This is the second time the two men have struck a deal to settle the suit filed by MacNeil and his business partner in the summer of 2004. In the suit, MacNeil and Gail Irwin, acting as J & C Entertainment LLC, sued Natali and former Pendulum owner Rob Kobila for breach of contract.

The two alleged they had a verbal agreement with Kobila to purchase the 18th Street bar, but at the last minute, Kobila sold it to Natali, who offered a higher price. Their lawsuit claimed they were owed $500,000 in damages.

Last July 12 Natali announced he had decided to sell his 90 percent stake in the bar to MacNeil and Irwin for an undisclosed amount to settle the suit. The deal began to fall apart only two days later when the ABC announced it had conditionally approved Natali's request to transfer the Pendulum's license into his name and refused to revoke his liquor license at his other Castro bar, the Badlands.

In June 2004 a group of Badlands patrons and former employees accused Natali of racist and discriminatory practices at the bar, and the city's Human Rights Commission staff agreed with the complainants. Natali has consistently denied the charges, and after a yearlong investigation, the ABC said it lacked sufficient evidence to find Natali had discriminated against his patrons based on race.

On July 20, 2005 Natali closed the Pendulum and laid off the staff, prompting a protest by black community activists who charged he had shut the Pendulum in retaliation for their boycott of his establishments and the charges filed against him. At the time, MacNeil said he had approved of Natali's decision to shut the bar and begin to renovate it and expected to complete the transfer of the bar into his name by the fall.

But the city had issued the work permits in Natali's name, and barring a reversal of the ABC's decision at a planned hearing, he still owned the bar's liquor license. In September 2005 the initial settlement collapsed and MacNeil revived his lawsuit against Natali.

The ABC never did hold a hearing on the Pendulum liquor license. Natali and the group of Badlands complainants came to a mediated agreement in January 2006, and the complainants dropped their challenges to Natali's liquor licenses. On March 21 Judge Arlene T. Borick dismissed MacNeil and Irwin's suit against Natali.

Asked about the lawsuit in an interview Friday, March 31, Natali said, "It's settled," and added that he had asked Badlands bartender, David Sims, who is black, "to help me put [the Pendulum] together."

Sims declined to comment. Natali said he hopes to have the Pendulum space reopened in time for Pride this year.

"We are gutting the place. As you already know, we are doing a major renovation," said Natali.

As for keeping the name, he said, "We don't know. We are talking about that now."

Natali faces one last legal challenge regarding his purchase of the bar. Former Pendulum bartender and party promoter Enrique Jimenez sued Natali for discrimination and wrongful termination last July after he was fired. A superior court judge has given the two sides until May 10 to mediate a settlement in the case.

As for MacNeil, he said in a phone interview April 4 that the latest outcome to his lawsuit "wasn't my first choice. It was the only agreement we could come to."

While displeased with the settlement, MacNeil said he nonetheless is glad it is over.

"It's a very emotionally draining process, not to mention financially. Lawyers aren't cheap," he said. "I am looking for a location for the Detour. It has not been very easy. That is really where things are at this point."

He has looked at several spaces in the Castro but all would present more hassles, MacNeil said, including fighting neighbors who most likely would be against having a bar open next door to them. He said the best solution would be to buy a restaurant with a wine and beer license and turn it into a bar.

But he said, "In a tight neighborhood like the Castro it is not easy to find" such a space. One thing is certain, though, if he does find a space.

"The Detour name is not that valuable. The name is not that important to me," he said.






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