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Seattle grapples with sudden bankruptcy of local star Paseo

Observers of the Seattle dining scene are trying to solve the mystery of how Paseo, a pair of popular sandwich shops, was forced into Chapter 7 bankruptcy this week.

The outlets are proof that Yelp reviews don’t guarantee success. The concept was ranked second on Yelp’s list of the 100 best places to eat in America.

The two Paseos closed without forewarning to customers on Tuesday. Local media reported the next day that the business had filed for Chapter 7 bankruptcy, a form that, unlike the Chapter 11 version, usually signals a breakup and sale of the business.

Court records showed the restaurants owed more than $30,000 to various creditors. Local media reports also cited the possibility of tax liabilities stemming from a civil suit that was filed against the restaurants by four former employees who alleged wage-and-hour violations.

The shops were run by Lorenzo Lorenzo, who launched the concept some 20 years ago.

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