Scratch Pastries and Scratch French Cafe Closed; Owners Duc and Noelle Liao To Declare Bankruptcy

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Life got a little sweeter when Duc and Noelle Liao opened Scratch Pastries in a Scottsdale strip mall in 2008, bringing French café food and elegant, inspired pastries to an otherwise dreary corner in central Scottsdale.

See also: -- Scratch Pastries To Open Phoenix Location in February; Think Baguettes, Burgers and a Bar -- The Anatomy of a Macaron with Duc Liao of Scratch Pastries

And it got sweeter still when the couple opened a second location called Scratch French Cafe in the former Canvas space on Roosevelt Row just a few months ago. But it's all come to an abrupt end. The Liaos have closed both locations and Noelle told Chow Bella this morning that they intend to declare Chapter 7 bankruptcy once they sell their family home.

What the hell happened? According to Noelle, the couple applied for a loan to several banks, all of which turned them down for being too high-risk. She says they needed the money to fix up the old building they planned to renovate on Third Street and Roosevelt and eventually found another lender that lent them a total of $120,000 in three separate loans.

Then, according to Noelle, "Everything went haywire."

The old building needed extensive work and everything took longer than they'd anticipated. Meanwhile, she says, the investors wanted their money back immediately. When the Liaos were late on a payment, she says the lender immediately threatened foreclosure. She adds that she and Duc sought the advice of a lawyer, who eventually advised them that the easiest thing to do was simply call it quits.

"We considered selling our Scottsdale location and selling our house to move downtown. We wanted to become part of the community and involved with the Phoenix Public Market. But nobody was willing to help us out in any way. It's been a frustrating three months," she says. But, she adds, "The restaurant is so beautiful, and the community has been supportive. It was the nicest thing we've ever done."

Meanwhile, she says Duc is scrambling to find work to support his wife and three little girls. Seems like a guy with his skill set would be a natural for a nice resort.

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