Boston says it won’t stop Barbara Lynch from selling restaurants during tax fight

In the ongoing legal fight between celebrity chef Barbara Lynch and the city of Boston, both sides have filed a proposal in court that will allow her to sell her remaining two restaurants on the condition that she puts the profits aside for Boston to collect unpaid taxes.

The city filed suit against Lynch and his seven Boston restaurants last month, claiming they owe $1.7 million in unpaid taxes dating back more than a decade. Lynch is fighting the lawsuit.

Initially, the city also sought a preliminary injunction to prevent Lynch from selling restaurants. The proposed order Monday — which still requires a judge’s approval — would allow proposed restaurant sales to continue as long as proceeds are placed in an escrow account.

In Massachusetts, businesses must pay personal property taxes to municipalities each year on tangible items that can be moved, such as business equipment or furniture. The city sent final demand letters to restaurants demanding payment in January, several days after Lynch announced she was closing and selling five of her Boston restaurants.

The tax lawsuit is the latest setback for Lynch, a James Beard Award-winning chef and restaurateur. She was accused by former employees of abusive behavior and promoting toxic work environments in two articles published last April by the Boston Globe and the New York Times. Lynch vehemently denied the allegations.

Several former employees also sued her for allegedly refusing tips for two months during the pandemic. That lawsuit is ongoing and Lynch has denied the allegations. Two specialty salespeople sued Lynch for unpaid invoices in Boston small claims court. Both cases were resolved.

Lynch has not commented on the tax lawsuit and did not immediately respond to a request for comment. (An earlier court hearing suggested that Lynch might be personally removed from the lawsuit, but that change does not appear in the filings.)

Lorraine Tomlinson-Hall, chief operating officer of the Barbara Lynch Collective, told WBUR earlier this month that a group of investors who had planned to purchase Lynch’s two remaining restaurants — No. 9 Park and B&G Oysters – could have walked away from the deal if the lawsuit halted the process.

“62 jobs are at risk,” Tomlinson-Hall said. “It’s very scary and disturbing.”

Tomlinson-Hall said the restaurant group was “blindsided” by the lawsuit and sought — unsuccessfully — to communicate with the Boston tax office when it received the final notification letters in January.