GREENFIELD — The Riley House Restaurant likely is closed for good.

A judge granted the Indiana Department of Revenue’s request Monday to bar restaurant owner Kimberly Lawrence from doing business until she pays more than $350,000 in back taxes and penalties — an amount her attorney said Lawrence likely can’t pay without liquidating the business.

Lawrence had expressed a belief she could reopen the eatery on Main Street just west of downtown Greenfield, but she has been denied a bank loan to cover the taxes, her attorney, Michael Griffin, said following the hearing Monday.

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Lawrence said in court that she has no education beyond high school and no skills aside from restaurant management; without that income, she said, she doubted she would be able to catch up on her taxes.

Indiana deputy attorney general John Frank appeared in Hancock County Superior Court 1 on Monday on behalf of the Department of Revenue. He said Lawrence hasn’t paid state-required taxes since 2006, and her failure to pay taxes “is essentially equal to a theft.”

Lawrence, who has owned the restaurant since 1981, has not been criminally charged.

“That 25 years of compliance is nullified by nearly 10 years of noncompliance, to the tune of more than $300,000,” Frank said in court Monday. “It’s going to take her longer to pay back that amount than it took her to incur it.”

Court records state Lawrence owes about $301,000 in taxes and about $52,000 in fees and interest.

That includes $277,000 in unpaid sales tax, nearly $34,000 in unpaid withholding tax from employee payroll, more than $40,000 in unpaid food and beverage tax and the rest in unpaid corporate tax.

These particular types of taxes are commonly called “trust taxes” by the revenue department, Frank said. In her role as the business owner, Lawrence is trusted by the state to report the sales taxes, food and beverage taxes and employee withholding taxes her costumers and workers pay to her.

“She serves as an agent of the state to report that,” Frank said. “There are ongoing violations of the law, which is why the state is looking to prevent Ms. Lawrence from continuing to do business and continue to violate the law.”

The state revoked Riley House Restaurant’s Registered Retail Merchant Certificate in November 2012. The license is required to be maintained in order for a business to stay open. Lawrence continued to operate her business for two years illegally without the certificate, court records state.

“The concern is that, if allowed to reopen her business, that ongoing violation (of the law) will continue to happen,” Frank said. “The fact is that she’s openly stated she’s unable to get a business loan, and she can’t pay the current obligations.”

Lawrence told the court she opened Riley House Restaurant with her mother in 1981, almost immediately after Lawrence had graduated high school.

She said her mother served as the business’s bookkeeper until she fell ill between 2004 and 2006.

Lawrence blamed her mother’s medical situation for the missed tax payments.

Lawrence said the restaurant is her only asset and only realistic opportunity for employment.

“I have no job skills, no registered trade,” Lawrence said. “I feel that I could pay them more per month if I remain open than what I could pay them if I were to get a regular job.”

Lawrence is not the only one out of a job; her 10 employees also have been left in limbo, Griffin said.

Among them is Harley Gilman, who had worked at the restaurant for the past four years. She said she considered her co-workers like family.

“It always felt like a second home. Kim was like a second mom to me,” she said. “We knew that she had some troubles with her finances, but we did not have any warning of this until the day it closed.”

Griffin said his client is open to working with the state in order to come up with an agreement, although it seems unlikely that the business will be able to reopen.

“Unless there is some lender who is willing to step forward to help keep the restaurant going, I think she sees her ultimate option as to liquidate,” Griffin said.

In your words

“I’m just upset that we are losing this as a restaurant choice. But if she didn’t do what she was supposed to do, then shame on her.”

Lory Shrout, Greenfield

“Kim was like a second mom to me. We knew that she had some troubles with her finances, but we did not have any warning of this until the day it closed.”

Harley Gilman, Greenfield

“I feel bad that a local business that employed local people is going to be closed. I find it hard to understand why the state thought that this was the best approach.”

John Patton, Greenfield

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Caitlin VanOverberghe is a reporter at the Greenfield Daily Reporter. She can be reached at 317-477-3237 or cvanoverberghe@greenfieldreporter.com.