Home Debt Muddy Paws Cheesecake re-opened but with some big changes.

Muddy Paws Cheesecake re-opened but with some big changes.

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Muddy Paws Cheesecake’s shutdown turned out to be short lived but its staying power is still in question.

The St. Louis Park bakery, which had closed Dec. 27 under $480,000 in debt, re-opened Jan. 10 after a plea for public donations caught the attention of CEO and TV personality Marcus Lemonis. Hearing of owner Tami Cabrera’s plight, the Camping World leader staged a business intervention Jan. 2 on Instagram live — similar to his CNBC reality show “The Profit” where he helped faltering small businesses — and instituted immediate changes.

One of the first happened that same night, when Lemonis crossed out $307,000 — almost two-thirds — of her total debt because it was a loan payable to Cabrera.

“Money owed to yourself never, ever passes the smell test with me,” Lemonis said on the stream. “I’m not saying that it’s technically incorrect or that you’ve done anything from an accounting standpoint that is wrong … but a business owner that owns 100% of their business cannot have money owed to them.”

Cabrera had explained on the stream that as an S corporation, she has to pay herself, but she had deferred taking a salary “to help out for paying for my staff, my family and my community.” When Cabrera started the donation campaign late last year, she had said she was a social media consultant who had never paid herself a salary because she founded the bakery “to give something back.” But she had stated on her website she hoped to pay herself a minimal salary if the donation drive was successful.

Danielle Ailts Campeau, associate dean at the Schulze School of Entrepreneurship at the University of St. Thomas, said it’s common for small business operators to not pay themselves, particularly when they’re trying to start a new company. Cabrera has been operating Muddy Paws for 30 years.

“It’s probably the hardest reality that many of the entrepreneurs we work with come to grips with,” Campeau said.

In a text message, Lemonis said he was “disappointed” in Cabrera’s initial approach to her own payment, but he commended her quick modification once he pointed it out to her.

In fact, the donation campaign — originally set to end a week ago but extended to mid-February earlier this week — has now ceased, any mention of it taken off her newly designed website as of Thursday.

Cabrera said earlier this week the campaign had raised $18,700, a fraction of her goal to cover half ($240,000) of her original debt, and she used that partly to pay back rent. She’s now focused on dealing with a new debt total (sans her large self-payment) of $178,000 that encompasses several loans — including a $70,000 from a friend — a credit card balance, advertising fees, utilities bills and compensation owed to eight vendors who sold goods at her now-closed West End Artisan store at the Shops at West End.

Lemonis plans to continue to help Cabrera’s business. In addition to placing a $40,000 order for cheesecakes to give away to his social media followers, he set her up with a new website from Shopify, an e-commerce tool for building an online store, and helped her whittle down her available flavors from 222 to seven. Muddy Paws has also added some new signage and did some remodeling at its physical store.

Cabrera declined to go into further detail on her salary situation earlier this week and mentioned having to deal with threats and other negative responses since asking the public for financial help.

“I lost my house during the last few years,” she said on the Instagram live. “And I’m just saying that I needed to find a way to actually be able to survive.”

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