The Board of Selectmen voted 4-0 this week not to renew the full liquor license owned until last fall by Sweeney's Retreat.
That vote was a disappointment to the bankruptcy trustee, who wanted to auction off the full liquor license to raise money to pay off the creditors of Sweeney's Retreat. It is likely to set off a fight before the Massachusetts Alcoholic Beverage Control Commission and before the federal bankruptcy court.
Kathleen Cruickshank with the law firm of Murphy & King, the trustee for the Sweeney's Retreat bankruptcy, said her firm is "trying to avoid litigation" over the license renewal. "We prefer to work consensually."
The Sweeney's Retreat license, one of 20 the state allocates to Marblehead, came up for renewal on Nov. 30. The trustee did not meet that deadline, but Cruickshank said under bankruptcy law, the trustee has a longer period of time to file for a renewal of the license.
Lisa Mead, the town counsel, disagreed with that interpretation. So the trustee applied for a new license in place of the expired Sweeney's Retreat license. If granted, the trustee would auction off the license to raise money, Cruickshank said.
But the application was incomplete because Sweeney's is closed. So the Selectmen rejected it. Selectman James Nye was not present.
The availability of all-alcohol liquor licenses in Marblehead became a hot topic last fall, when the town's new Mexican restaurant Casa Corona applied for and was granted Marblehead's first ever carry-in alcoholic beverage license.
An attorney for Casa Corona spoke in favor of the Selectmen granting the new license, because the new Mexican restaurant would like to bid on acquiring it.
Town Administrator Jeff Chelgren said the town would get a fee of $1,500 for a new license. But he said it would be up to the market to determine the value of auctioning off the Sweeney's Retreat license.
The next step for the trustee is to appeal the Marblehead decision to the Alcoholic Beverage Control Commission, Cruickshank said.