Gunning's Crab House, the South Baltimore landmark that has sold hot steamed crabs for the past 22 years, is scheduled for auction Tuesday, possibly putting an end to the rustic neighborhood restaurant whose food has drawn the likes of Danny DeVito, Jack Nicholson and Mel Brooks.
The property, at 3901 S. Hanover St., will be auctioned at 2 p.m. June 25. A $15,000 deposit is required at the time of the sale, Robert Sloan III, an attorney for the mortgagee, said yesterday.
Mr. Sloan said that a partnership of Gunning family members defaulted on a $160,000 mortgage from Laurel Federal Savings Bank. The partnership owes the bank roughly $175,000, which includes interest, he said.
"We're still open for business. I hope we don't lose this place, but there is nothing else I can say right now," said Edward Gunning, who left his job as a Baltimore policeman in 1969 to start the crab house with his father, Andrew.
"I am working minute-by-minute and hour-by-hour to get this auction called off. I'm trying to work something out that is acceptable by Laurel Federal Savings Bank and doable by the Gunnings," said Howard Heneson, the lawyer for Gunning's Crab House.
"It's just that the gap is fairly well-defined, and the bridges are hard to come by."
Gunning's Crab House, famed for its steamed crabs and fried pepper rings covered with powdered sugar, filed for Chapter 11 under the U.S. Bankruptcy Code in March and has since been struggling to reorganize.
Salaried workers have taken wage cuts and some employees have been laid off in an effort to return the restaurant to profitability.
The bankruptcy filing stemmed from a fire that destroyed the inside of Gunning's Ocean City location at the height of the crab season in August 1989. The building was underinsured, and the family has been unable to sell the property.
The family partnership that owns the Brooklyn building on Hanover Street was not included in the reorganization filings in March, so the property is not protected by the courts, enabling it to be sold at auction next week, Mr. Heneson said.
Mr. Heneson said that the family partnership, trading as Gunning's Tavern, may be taken into bankruptcy to hold off the auction.
Ironically, the auction is coming in the midst of the crab season, when business traditionally picks up at crab houses. The season could improve Gunning's cash flow and put it in a better position to reorganize.
"I just don't know what's going to happen," said the crab house's manager, Cal Etheridge, who is related to the Gunning family by marriage.