Unraveling Mosun’s Demise

Mosun's master sushi chef Toshi Chung prior to its closure.

The popular Laguna Beach sushi bar and night club Mosun abruptly closed last week under legal pressure, an attorney for the landlord said.

After filing various legal appeals that forestalled eviction for more than seven months, the restaurant’s owner abandoned the premises on Sunday, Aug. 7, leaving behind shattered mirrors in the upstairs nightclub, and debris and broken liquor bottles on the ground floor. “There is evidence of mayhem when they departed,” said Irvine attorney Herbert Niermann. The following day, Aug. 8, a court imposed a default judgment against the restaurant’s operators, he said.

Now, brown paper obscures the large ground floor windows on Coast Highway that formerly framed a younger party scene crowding Mosun’s long bar. The nightspot’s upstairs club also hosted reggae concerts and fashion shows.

Niermann represents the landlord, Irvine’s Coast Retail Investments Inc., and its president, Mike Rafipoor, of Newport Beach. Rafipoor is negotiating with several potential tenants, concerned that the building’s conditional use permit could lapse and the property’s value diminish without occupancy, the attorney said.

Even so, Mosun’s owner controls the valuable liquor license, which can be transferred, but since its principals have not responded to litigation, Niermann suggested the prospect was unlikely. Obtaining a license on short notice through a broker can cost $30,000, said Karyn Phillipsen, president of Laguna’s Visitor’s Bureau.

The license expires next month, said John Carr, a spokesman for the state Alcohol Beverage Control Department.

Coast Retail’s properties at 670 and 680 Coast Highway, acquired together in 2005, are already in foreclosure, Niermann said. The neighboring retail space north of Mosun was leased by the lingerie boutique Demi Things, whose owner also tried to renegotiate terms, but is now in the process of closing shop, Niermann said.

“They were not able to generate the income stream,” Niermann said of Mosun’s most recent owners, Kelo Enterprise LLC and its principals, Keon Jae Lee and Lori Cha, which also filed for bankruptcy protection in April. Efforts to reach Lee and Cha were unsuccessful. A former manager refused comment.

A separate restaurant company controlled by Rafipoor operated Mosun profitably for nine years, but sold the bar and nightclub in October 2009. Court records show that 12 months later, Coast Retail was filing suit against Kelo for failing to pay on its lease.

“Mosun was at the top of its game when it was sold,” Niermann said. “A staff that was honed and trained, knew the levers to pull,” he said, including offering midweek sushi discounts to appeal to locals. “Business took off,” despite the economic doldrums of recent years, he said.

But the ownership change resulted in a shift in management as well. “Kelo axed all of those things. They couldn’t see they were forfeiting a lot of collateral business,” Niermann said. A recent Facebook page, however, showed Mosun still luring locals with discounts.

While Kelo wanted to renegotiate lease terms, Coast Retail lacked the flexibility to do so, according to Niermann. Coast’s debt is owed to a federally regulated lender that would not adjust lease terms until the property was in foreclosure, he said.



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