Bankruptcy may do what Prohibition couldn’t: Stop the beer from flowing at P.J. Hanley’s

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Brooklyn’s oldest watering hole could go the way of the trolley car after it is sold at auction next month.

P.J. Hanley’s owner James McGown filed for corporate bankruptcy last week and plans to sell all of the historic Carroll Gardens bar’s assets including the business’s lease, equipment, and booze to the highest bidders on March 18.

McGown claims he has received several offers to purchase Hanley’s, some from entrepreneurs who hope to continue the pub’s 139-year run, and some from would-be buyers who would do what even Prohibition couldn’t and turn the Court Street storefront into a retail space that doesn’t serve beer.

“We’ve gotten a lot of offers to turn the place into something else,” said McGown, whose Chapter 11 bankruptcy filing states the business has $1,250,000 in assets and $450,000 in debt.

The bar now known as P.J. Hanley’s opened in 1874 as Ryan’s, and managed to survive Prohibition as a speakeasy with shuttered windows and escape routes. John Hanley bought the pub in the ’50s and ran it until he sold it to his nieces in 1995. They kept the bar going for nine years before the business went to McGown in 2005, but have held onto the building.

McGown — who filed for bankruptcy last year for his pie chain South Brooklyn Pizza — listed multiple explanations for his bar’s financial woes in his bankruptcy filing, including thieving managers who allegedly gave too many free drinks to patrons, and disputes with his landlords over building repairs that escalated into court proceedings.

“The landlords are upset that I’m paying $6,000 a month here,” said McGown. “They know they can get much more than that, so they don’t want to acknowledge the lease.”

Deborah Hanley, one of the McGown’s landlords and a former P.J. Hanley’s owner who chose to sell when the pressures of raising small children made the day-to-day operations too much to handle, denies she has attempted to void the barman’s lease and says there is nothing she wants more than a bar in the space.

“He’s making a stink about something that’s totally fabricated,” said Hanley. “He has a lease that’s up in 2020, and there’s no way we can raise the rent. We’d love to get more rent for that space, because rents in the neighborhood are sky-high right now, but we can’t.”

Hanley said the lease stipulates that the tin ceilings and the antique bar itself cannot be removed or altered, but she acknowledges that the space could host a different kind of business, depending on who wins the auction.

If the space ceases to operate as a watering hole, she says she will be heartbroken.

“Hanley’s has been around forever. We’ve always had giant Saint Patty’s Day parties,” said Hanley. “It’s hard to see your name associated with something like bankruptcy. Hopefully, it will remain a bar.”

Neighbors, many of whom have frequented the neighborhood hangout for decades, agree.

“You always feel terrible when something that’s been around for so long goes away,” said Larry Love, who has been drinking at P.J. Hanley’s for more than 40 years. “It’s a part of the neighborho­od.”

Reach reporter Danielle Furfaro at dfurfaro@cnglocal.com or by calling (718) 260-2511. Follow her at twitter.com/DanielleFurfaro.
Updated 6:41 pm, February 28, 2013
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