Madame Tong's open for holiday weekend

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Officials from the New York State Department of Taxation and Finance put up these signs on Thursday.

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The New York State Department of Taxation and Finance gave the keys to Madame Tong’s back to Ed “Jean Luc” Kleefield on Thursday, July 2, one day after seizing the Southampton Village restaurant for tax delinquency, and in time for the restaurant to open for the holiday weekend.

Mr. Kleefield and his Hamptons restaurants owe the state $320,000 in outstanding taxes, according to department spokeswoman Susan Burns, but Madame Tong’s was returned because Mr. Kleefield presented the department with paperwork showing Madame Tong’s has filed for bankruptcy.

On Wednesday, July 1, the windows of Madame Tong’s were plastered with orange notices saying the restaurant was seized for nonpayment of taxes. “It’s a complete misunderstanding,” Mr. Kleefield said that day. “I paid all my taxes up to date at the end of last year.”

The seizure came just two days before the start of the holiday weekend, an important time for East End restaurants. “Another curveball thrown my way,” Mr. Kleefield lamented, but he got his restaurant up and running again in time.

Ms. Burns said Madame Tong’s failed to remit $105,000 in state sales tax it collected from customers between June 2007 and May 2008. Additionally, she said Mr. Kleefield had a limited liability company named Wazoo that is now out of business, but which still owes the state $56,000 in sales tax it collected and $10,000 in income tax that it withheld from employee paychecks.

The department spokeswoman said Mr. Kleefield’s three other East End restaurants owe $150,000 in outstanding taxes—$19,000 in sales tax from JLX Bistro in Sag Harbor, $51,000 in sales tax and $1,800 in income tax withheld from employees at Grappa Wine Bar, also in Sag Harbor, and $74,000 in sales tax and $4,600 in income tax withheld from employees at Prime 103 in East Hampton, formerly known as JL East.

The state has not made moves to seize the other restaurants.

“I cannot comment, or verify anything that the Department of Taxation and Finance has said,” Mr. Kleefield said Thursday. “I’m happy for my staff, my partners and the community that we’re still open and busy and will have everything resolved—if it needs to be resolved—in the near future.”

Madame Tong’s and Mr. Kleefield’s other three Hamptons restaurants have been the subject of an ownership dispute between Mr. Kleefield and local businessman Lyle Pike. The men have been in and out of court for about a year, but last month Mr. Kleefield claimed victory on the Madame Tong’s front. On June 17, an appellate court put a temporary hold on an eviction warrant issued by Southampton Town Justice Court that would have forced him from the building.