Re: Pakistani politics in Houston
For the past ten years there has been so much mud slinging on Pakistani radio programs in Houston. Many radio programs were banned for threatening others, many arrested..
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The Pakistani community is embroiled in a dispute that pits supporters of Ghulam Bombaywala, president of the Pakistani-American Association of Greater Houston, against the camp of City Councilman M.J. Khan.
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http://www.chron.com/disp/story.mpl/metropolitan/3574049.html
Jan. 9, 2006, 4:48AM
Exec’s money troubles spark more discord
Restaurateur’s Chapter 7 case widens rift among area’s Pakistanis
By EDWARD HEGSTROM
Copyright 2006 Houston Chronicle
Ghulam Bombaywala, the prominent local restaurateur whose rags-to-riches tale has been told on The Oprah Winfrey Show, claims in a pending bankruptcy that he now has $240 to his name.
The Pakistan-born entrepreneur’s personal bankruptcy stems from the failing of one of his companies, Five Star Restaurants, which also declared bankruptcy in 2003. Five Star at one time had more than 40 restaurants, including branches of Marco’s Mexican Restaurants and the Original Pasta Co.
Bombaywala owes more than $6.6 million to the Internal Revenue Service and $850,000 in back taxes to the state of Texas, according to court records in his personal bankruptcy.
Bombaywala downplays his financial problems, noting that he is just one of 600,000 people who filed personal bankruptcy before a change in the law took effect in October.
“A lot of big names in Houston have filed” for personal bankruptcy recently, said Bombaywala, who has served on the boards of the Sam Houston Area Boy Scouts of America, the United Way Gulf Coast Chapter, the Houston Food Bank and the Asia Society of Texas.
Asked about the state of his personal finances and how he is making a living now, Bombaywala said only that others in his family continue to work. And despite stating in his bankruptcy filing that he is nearly penniless, he continues to collect $6,000 a month for his position as president of Michelangelo’s Restaurant, his records indicate.
Dispute with councilman
His financial problems have fanned a simmering feud in the Pakistani community that pits him against City Councilman M.J. Khan. Critics of Bombaywala make frequent reference to his bankruptcy, and they allege that his business practices reflect the way he runs the Pakistani-American Association of Greater Houston, of which he serves as president.
The feud has not drawn attention outside the community, because much of it involves insider parliamentary issues around the management of PAGH. Bombaywala says that only a “small group” of Pakistanis have disagreed with him, and he dismisses their claims as mostly personal.
“I think our people enjoy all this rowdiness,” he said of the ongoing feud. “We are very opinionated people.”
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But others say the feud has begun to have serious, lasting implications. The differences run so deep that the community could not come together to work on relief efforts after the recent earthquake in northern Pakistan and Kashmir. Bombaywala and Khan worked on separate efforts.
Leaders also have split over plans to build a multimillion-dollar Pakistan Community Center. Volunteers at PAGH have worked for more than a decade toward building a center designed to serve and unite the community. Bombaywala has continued the effort, but he parted ways with his predecessors on buying a former grocery store on Bissonnet — a move some in the Pakistani community did not support, because it involved taking out a large loan.
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Kahn concedes the feud exists, but says he doesn’t understand it. “I wish I knew what it is,” the city councilman said.
Bombaywala’s rise to success is practically legend in Houston. He came to the city in 1973 on a student visa with less than $50 cash, and was turned down for a dishwasher job at Michelangelo’s in Montrose because he lacked sufficient English.
Years later, after finding success first with convenience stores and then with restaurants, Bombaywala bought Michelangelo’s. (It is now officially owned by his son).
He bought or started 16 Marco’s Mexican Restaurants and became a major investor in such chains as James Coney Island and Gugenheim’s New York Deli. He has received numerous awards from such groups as the Asian Chamber of Commerce, the Asia Society and the University of Houston Law Center.
Bombaywala says his financial difficulties began with a business merger in the early 1990s that saddled him with roughly $17 million in hidden debt.
Watermarc Food Management Corp. declared bankruptcy in 1999. The company was reorganized as Five Star.
Five Star declared bankruptcy in 2003. Bombaywala filed his personal Chapter 7 bankruptcy in October.
Lawsuits add to woes
The government trustee in the Five Star case filed a number of related lawsuits alleging Bombaywala and other associates funneled nearly $2 million out of Five Star and into other companies.
Separate suits allege Bombaywala wired nearly $150,000 to the Bombaywala Family Trust, $28,000 to Chris & Pitts Food Products Inc., $320,000 to Michelangelo’s Restaurant and $1.4 million to GMB Consulting Inc. All except Chris & Pitts are local entities in which Bombaywala is listed as a principal.
Chris & Pitts is fighting the legal claim, arguing that Bombaywala is not the owner of the company.
Bombaywala denies wrongdoing, blaming his financial problems on a former business partner.
Some of the suits were put on hold after Bombaywala filed Chapter 7 personal bankruptcy, but a federal judge granted default judgments in the Michelangelo’s and GMB cases after Bombaywala failed to appear to defend himself.
“What we believe we see is a pattern, which is using an entity until it is no longer valuable and then moving on,” said David Jones, the attorney for the trustee in the case.
Nancy Rapoport, dean of the University of Houston Law Center and a bankruptcy expert, noted that Chapter 7 is particularly grave. "When you file for Chapter 7, it says, ‘I give up,’ " Rapoport said. A person who files for Chapter 7 “may well be in dire straits,” she said.
:o :o