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Troubled Hollywood Palms sold, new owner seeks upgrades

In the wake of a $1.3 million tax evasion case filed by the state, the Hollywood Palms movie theater in Naperville has been sold to Houston, Texas-based Star Cinema Grill.

The acquisition closed Tuesday and terms of the deal were not disclosed. The Naperville theater joins another Star Cinema Grill that opened two years ago in Arlington Heights and more could be added later, Star Cinema Grill Vice President of Operations Gustavo Vazquez said Thursday.

"There will be no interruption of service and everything is going to continue to operate the same, at least through the summer, when we plan to make some upgrades," Vazquez said about the Naperville location.

Upgrades include expanding the hours of operation and adding more screens and seating, including leather chairs. More workers also may be hired. More than 100 employees will be retained, he said.

Star Cinema Grill offers customers meal and bar service while they watch first-run movies. It has three locations in Texas and two now in the Chicago suburbs.

The Hollywood Palms opened in September 2009 as a combination movie theater, bar and restaurant offering dinner and a movie. But the company behind the theater ran into trouble with the state last year.

The Illinois Department of Revenue and the Illinois attorney general's office filed a lawsuit in December 2014 against Hollywood Palms owner Edwin C. "Ted" Bulthaup III of Woodridge.

Bulthaup was accused of evading sales taxes and use taxes at the Naperville theater and at Hollywood Blvd. Theater in Woodridge, which he had owned and operated until February 2014. He was accused of underreporting sales by about $18 million at the two theaters between 2009 and 2013, according to court documents.

Bulthaup said in a published report last December that he "never committed fraud." He did not return a call seeking comments on Thursday.

The charges he faced included sales tax evasion, fraud and 104 counts of wire fraud, according to the Illinois attorney general's office. The next court date for the tax case is May 19.

In February, the Naperville Theater LLC, doing business as Hollywood Palms, filed a Chapter 11 bankruptcy petition in federal court. The company had roughly $800,000 in assets and $8.3 million in liabilities. It was seeking a new owner and intended to remain open for business.

Bulthaup previously worked as a concert promoter and as a theater operator in Indianapolis.

•Daily Herald Staff Writers Marie Wilson and Justin Kmitch contributed to this report.

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  Ted Bulthaup was the owner of the Hollywood Palms and Hollywood Blvd. movie theaters in Naperville and Woodridge in this January 2012 file photo. MARK BLACK/mblack@dailyherald.com, JANUARY 2012
  Inside the Hollywood Palms in Naperville in January 2012. BEV HORNE/bhorne@dailyherald.com, JANUARY 2012
  Movie posters hang above the lobby at the Hollywood Palms in Naperville. BEV HORNE/bhorne@dailyherald.com, JANUARY 2012
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