Gunning's Crab House, a South Baltimore landmark famed for its hot steamed crabs and fried pepper rings covered with powdered sugar, has filed for reorganization in the U.S. District Court of Baltimore.
Cal Etheridge, one of the owners and the manager of the 22-year-old Brooklyn tavern and restaurant, said yesterday that the filing for Chapter 11 bankruptcy protection stemmed from a fire that destroyed the inside of Gunning's Ocean City location at the height of the crab season in August 1989.
That restaurant, located on Coastal Highway and called Gunning's House of Seafood, was left inoperable, and the Gunning family has not been able to sell the building or the three-quarter-acre track of land on which it sits. The property was appraised at $800,000 last year.
"We were underinsured," said Mr. Etheridge, who is related to the Gunning family by marriage. "The fire totally devastated the Ocean City restaurant," and the owners had to swallow the loss.
Gunning's Crab House's assets were listed as $122,134 and its liabilities as $770,542 in bankruptcy papers filed Monday.
Gunning's House of Seafood also filed for reorganization under the name H&D Inc., but Mr. Etheridge said there are no plans to reopen the restaurant in Ocean City.
"We need to concentrate on one place. Ocean City was a drain, financially. It was only open 100 days out of the year, but we had expenses on it all year round," he said.
"We like to consider ourselves a real family establishment, and it's good for us to all be back in one place."
Gunning's Hanover Street crab house will remain open throughout reorganization, Mr. Etheridge said, although some employees may have to be laid off.
The crab house employs about 35 people during its off-season and 80 people when the crab business is at its peak between June and August.
"The salaried people have already taken wage cuts" to help the restaurant, Mr. Etheridge said, but the key to profitability will be selling the property in Ocean City.
"But with the soft economy, we're not going to get the $800,000 it was appraised for until an upswing," Mr. Etheridge said. "Since Ocean City is a tourist attraction, we're hopeful."
Andrew Gunning and his son, Ed, opened Gunning's Crab House in South Baltimore in June 1969. Although the two had no experience in the restaurant business, Andrew left his job as a city supervisor and Ed left his job as a Baltimore policeman to give it a try.
The crab house, with its red-and-white checkerboard xTC tableclothes and paneled walls, has grown in popularity over the years and was picked as having the "World's Best Crab Cakes" by Esquire magazine in 1989. Danny DeVito went to the restaurant several times a week during the filming of "Tin Men" in Baltimore, Mr. Etheridge said, and returned with friends Jack Nicholson and Mel Brooks after the filming was over.