Resurrecion "Sony" Florendo, a Baltimore restaurateur whose seven-year losing battle with Japan's giant Sony Corp. became a nationally publicized Goliath-stomps-David story, now faces an even more formidable adversary: the Internal Revenue Service.
The IRS has filed liens amounting to $217,203 against Sony's Philippine-Asian Foods, which operates a restaurant at 324 Park Ave. and food stands at Harborplace and Owings Mills Town Center.
According to liens filed Jan. 29 and Jan. 30 in Baltimore Circuit Court, the business' troubles with the IRS go back as far as 1984.
The IRS claims Sony's failed to pay withholding and Social Security taxes for every quarter except one from the middle of 1986 through the end of 1990. In addition, unemployment taxes for 1986 through 1990 have not been paid, the liens say.
Mrs. Florendo, 55, said Wednesday that the restaurants remain open and that "we are trying to work with the powers that be" to negotiate a payment plan. "We are not giving up," she said. "We will stay as long as people understand and cooperate."
Mrs. Florendo's troubles go back to her struggle with Sony Corp. over the name of her restaurants, which were originally called "Sony's" after Mrs. Florendo's nickname. The Japanese electronics company filed a $2.9 million suit against Mrs. Florendo in 1984 in Baltimore federal court, claiming the restaurants infringed on its trademark.
The struggle between the corporate behemoth and the determined immigrant from the Philippines dragged on for years, and the corporation took a public relations pummeling as publications from the Wall Street Journal to London's Daily Telegraph picked up the story.
But in 1987, Mrs. Florendo threw in the towel as legal fees mounted. She reluctantly reached a settlement that let her operate for four years under the name "Sony Florendo's," but after March 1991 she was no longer allowed to use "Sony" on her signs or advertising.
Mrs. Florendo said her dispute with Sony Corp. and the resulting costs contributed to her business' financial woes.
"I had to spend a lot of money and a lot of time just taking care of the issue," she said. "I was really taking away from what I had to do." Mrs. Florendo admitted that she owes the government money, largely because of inadequate bookkeeping, but she said she owes less than the amount listed in the court documents.
Mrs. Florendo also said her restaurants, which now are called S.R.Florendo's, have been hurt by the recession. Business has slumped at all of her locations, she said.
IRS spokesman Dominic La Ponzina said a tax lien is a public notice that "protects the government's interests in any assets the corporation may hold" and holds the government's place in line in the event of a bankruptcy filing. According to Mrs. Florendo, the business has not filed for bankruptcy.
Mr. La Ponzina, who emphasized that he could not comment on any specific taxpayer's case, noted that a lien does not necessarily mean IRS agents will be padlocking the doors. The government, he said, has wide discretion in how it handles a tax lien case.
In many cases, he said, the government will negotiate a plan with the taxpayer to "chip away" at the debt. On other cases, it might order the business to sell off assets. In extreme cases, especially where the company cannot keep up with its current payments, the IRS will seize the business, he said.
Mrs. Florendo said she is confident that, with the help of friends, she and her husband, Geraldo, can raise the money to pay the debt and stay open.
"They will not see Sony Florendo just disappearing and not taking responsibility," she said.