Financial troubles led to closure of Jack’s

Jack’s Backyard owner Kathy Jack has not returned calls from Dallas Voice about the venue’s abrupt closing 10 days ago. But Marla Custard, one of the property owners, alerted us to some of the details behind the closure.

According to court records, Jack filed for Chapter 11 bankruptcy on Dec. 16, 2010, for the business, Jack Out of the Box LLC. Documents show the business owed hundreds of thousands of dollars to investors including Custard, as well as the IRS, the state comptroller’s office and the Texas Alcoholic Beverage Commission.

Considering that business seemed to be good at Jack’s Backyard, Custard said she’s still unclear about why the bills weren’t being paid.

Days before the club’s final Sunday on June 26, a judge dismissed the bankruptcy filing, saying the numbers didn’t add up in Jack’s plan to get out of the debt.

“That’s when it became clear Jack’s Backyard would have to close,” Custard said. Custard is one of about 15 people listed as creditors who invested in the venue, including recognizable names in the LGBT community such as Howard Okon, Laura McFerrin and Matt Miller.

Custard said she’s personally out more than $600,000, between her investment in the bar and loss of rent payments.

“We love this place,” Custard said. “I’m so mad at her [Jack] for this. It’s heartbreaking, but at the end of the day, it all rests in Kathy’s lap.”

The landowners are now looking for a new tenant.

In an email to the Dallas Voice, Custard forwarded documents from the case and gave us her breakdown of the events that transpired before the closing. Read a portion of her email after the jump.

—  Rich Lopez