Investor calls out ‘deadbeat’ business partner at Silo Deli

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(Photo by Caleb Smallwood)

by Eric Ginsburg

After Winston-Salem business Crown & Cork closed suddenly, a major investor found out the hard way that he likely won’t be paid what he’s owed, and there could be legal action against the owner, who also runs Silo Deli Wine & Cheese Bar.

Michael Touby admits he probably should have known better.

There were red flags over the last year — since he invested a considerable sum of money into Silo Deli and Crown & Cork near Wake Forest University — that suggested trouble ahead.

“I should’ve watched myself better,” he said, “but I was so excited about the industry and wine and food, and I let that sort of romance me into ignoring facts that should’ve been concerning.”

Touby had been friends with Chris Barnes, the owner of Silo Deli, for several years, and had even been in business with him before as in investor at Sixth & Vine. In early 2014, Touby invested “multiple tens of thousands of dollars” into Silo, launching Crown & Cork next door in Winston-Salem’s Reynolda Village and covering some of Barnes’ debts, he said. He declined to name an exact figure.

Midway through 2014, Barnes posted on Facebook and said he was quitting and couldn’t handle everything with the businesses anymore, Touby said. Barnes asked for more money to keep their shared vision afloat, and Touby obliged, he said. But then right after Thanksgiving, Touby was surprised to hear from other people that Barnes was trying to cut him out and would be closing down Crown & Cork.

“I asked him to start paying me back on some sort of schedule that we had agreed to in writing and he has failed to do so,” Touby said. “I don’t know if I expect to receive any of that money back. I have no idea how Silo is still open.”

Instagram screenshot
Instagram screenshot

It’s been several months, and Touby said Barnes hasn’t responded to multiple requests for repayment. By last week, Touby was fed up. Just before 10 a.m. on the morning of Jan. 29, he posted an image of a red button with the word “DEADBEAT” on Crown & Cork’s Instagram page, and called out Barnes and Silo Deli by name.

“Chris Barnes… takes money from investors and doesn’t pay them back?” he wrote. “What kind of person would do such a thing? Is this the type of businessman Winston-Salem should support? When you loan money to someone and bend over backwards to help them and then they turn their back on you and laugh in your face when it’s time to pay them back, it makes you wonder about the ethics of people running restaurants.”

Barnes did not respond to multiple interview requests for this story, but Silo is still open and employees confirmed that Barnes is still actively involved. Touby, who also worked at Crown & Cork, said the related business is closed but added that he has heard it may open occasionally on weekends.

The partnership didn’t unravel rapidly, Touby said, attributing the failure Barnes’ “slow, insidious, necrotic sort of apathy.”

There hasn’t been any face-to-face confrontation between the two, but Touby has “sent him the official kind of notices that a person is supposed to send,” he said.

“I expect him to pay me back just like a good person would,” Touby said. “Fortunately I have a contract with him that would let me take him to court or what have you to enforce his payment,” he continued. “I prefer not to go that route and to have him handle it as a good gentleman would but that would probably be my next course of action. I did cover myself by having him sign appropriate agreements, and so forth.”

Touby had invested money in Barnes’ ventures before, including Noma, where Jeffrey Adams restaurant now resides, and Sixth & Vine. Touby received his money back in both cases, he said, but Barnes’ ex-wife is the one who repaid him.

Despite the bad blood, Touby hopes Silo Deli makes money, but said “all of his kitchen staff has been let go” so he isn’t sure how that will happen.

“I need him to succeed,” he said. “I need him to do well in order to be able to pay me back but it’s been several months now and I haven’t received any money. I need to move on to my next projects.”

Touby has real-estate businesses that provide student housing and rental properties, communication companies that are connected to the pharmaceutical industry and a few other things, but he said his passion is food and wine. He and Barnes had planned to take over both floors of a barn at Reynolda Village, launching a club, event space and bar. The university, which owns the property, was thrilled, he said, and people who knew about it were very excited.

“I probably put $40,000 into just the planning of that space,” Touby said, listing off expenses including audio/visual consultants and architects. “I took a big loss in the planning of that alone.”

Now, Touby is planning something else, and he’s looking around downtown in the Wake Forest Innovation Quarter and on Trade Street, among other locations. He envisions a New York City-style restaurant, event space and bar, adding that he is big on paleo, gluten-free and biodynamic cuisine.

Touby has already taken initial steps, meeting with other real-estate folks and people with the city last week, but the cloud of his dealings with Barnes is still hanging over his head.

“People should honor their commitments and their obligations,” Touby said. “They end up hurting a lot of people when they don’t do that. I could’ve continued to help him. I’m perplexed.”

[UPDATE: Triad City Beat previously delivered 10 issues of the paper to Silo Deli every week, but was informed on Feb. 4 when this article ran that “We don’t want your paper here anymore.” See below for comments from former employees.]

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