###

PREVIOUSLY

• City of Eureka is Trying Very Hard to Evict the Owner of Humboldt Bay Social Club, Saying She Hasn’t Paid Rent in a Year and a Half

###

The City of Eureka’s ongoing attempt to evict the owner/operator of Humboldt Bay Social Club got an assist in U.S. Bankruptcy Court today as Judge William J. Lafferty dismissed the owner’s latest Chapter 11 filing, citing a “complete failure to comply with court orders.”

Humboldt Bay Social Club — a restaurant/bar and event venue with outdoor seating and onsite vacation rentals — is located at the Samoa Air Field, which is owned by the City of Eureka. Nicole Fryer purchased the business in July 2024 as the sole member of a limited liability company called Zephyr Hospitality, through which she rents the property. The city says Fryer owes roughly 18 months’ worth of rent and a total of more than $60,000. 

Fryer, meanwhile, says she’s trying to stabilize and continue operating the business after a series of setbacks. In court filings she says the business is generating $18,000 per month in revenue, and on April 1 the city received a cashier’s check from Zephyr Hospitality for $2,650, roughly one month’s rent.

But the city has been trying to evict her for months. On December 2, Eureka’s attorneys filed an eviction lawsuit (known as action for unlawful detainer) in Humboldt County Superior Court. The court later ruled in the city’s favor, awarding Eureka its back rent and granting the city permission to repossess the property.

However, six days before that ruling came down, Fryer had filed for Chapter 11 bankruptcy protection, which triggered an automatic stay on eviction for the duration of the bankruptcy proceedings. But Fryer, representing herself, had submitted an incomplete petition, according to the court records. She later filed a motion for an extension, saying she needed time to hire an attorney and gather “complete and accurate financial information.” The court granted the extension, but she failed to meet the next deadline and that case was dismissed.

She filed a second Chapter 11 petition early last month. The City of Eureka argues that Fryer is simply trying to stymie its eviction efforts with this second bankruptcy filing, and it has asked the court to lift the automatic stay so it can proceed with that eviction.

In bankruptcy proceedings, small businesses such as Zephyr Hospitality are legally required to hire an attorney, but Fryer has yet to do so. She appeared at today’s hearing via Zoom, which earned a rebuke from Judge Lafferty.

“You have no authority to be here,” he told Fryer. “As I think I’ve told this debtor more than once, you have to prosecute Chapter 11 through a lawyer.”

“I understand that, Your Honor,” Fryer replied. “I’m actively working to secure counsel as we speak. I request a short amount of time to do so.”

“It’s a little late for that,” he replied.

Also appearing via Zoom were Eureka Deputy City Attorney Gregory M. Holtz and a pair of federal trustees, one serving as an impartial administrator and the other assigned as a mediator, of sorts, to help restructure debts and allow the debtor to keep their business, if all goes as planned.

That’s not the case here. One of the trustees appearing today pointed out that Fryer failed to show up for the initial court-scheduled interview and was also a no-show at the initial meeting of creditors. He said the U.S. Trustees Office has no objection to dismissal of the case.

Judge Lafferty, citing Fryer’s failure to comply with court orders, said he didn’t have much choice except to dismiss the case, though both Eureka’s attorney and the trustees asked him to leave it open for administrative purposes. The city needs the case to remain open while it pursues relief from the stay that’s holding up eviction proceedings. Holtz also indicated that the city may try to prove that Fryer’s multiple bankruptcy filings were part of a scheme to delay, hinder or defraud creditors. 

The trustees also asked for the case to remain open for the purposes of discovery. They intend to investigate Zephyr/Fryer’s financial affairs and conduct. (One noted that an outside attorney appears to have improperly helped in the preparation of Fryer’s submitted materials.)

When Judge Lafferty announced his intention to dismiss the case, Fryer looked crestfallen. 

“I just want to stabilize this business,” she said, “and I’m just trying to fully comply with this court.”

Judge Lafferty cut her off. “You know, you can say that, but you’re not [complying], okay? I don’t know how else to say it,” he said. “I’m not trying to be flip or funny, but just, you know, this is a serious business. And it simply isn’t being prosecuted the way it needs to be.”

With that, he dismissed the case, leaving it open for administrative purposes. Fryer has been ordered to provide documents to U.S. Department of Justice’s Trustee Office by April 13 and to appear at an examination by that office on April 20. 

An email sent to Fryer this morning seeking comment for this story had not received a response by the time of publication.