Problems with money has forced a months-old diner in the city’s Liberty Village neighbourhood to close its doors.

A note found posted on the diner’s door at 60 Sudbury Street Wednesday indicates that the umbrella business, Academic Hospitality Inc., owes more than $260,000 in unpaid rent.

Recess, which opened this past summer, operated alongside Fountain, a retro-style soda shop under the same ownership.

A former employee of the restaurant told CTV Toronto Wednesday that staff at the diner had not been paid for months and that some vendors were also owed money.

“I waited until about the third cheque bounced and then I realized I just couldn't take it anymore,” Zach Bertrand, a former employee at Recess, told CTV Toronto.

Bertrand is one of nine employees who have filed formal complaints to the Ministry of Labour against Recess owner Brad Moore. The employees allege the owner owes them a total of $14,000 in unpaid wages, tips and overtime. It was not clear whether they planned to take legal action to recoup the pay.

“(The) tips disappear,” Bertrand said. “I made my own personal tips. I know that everyone else in-house… they never delivered them to us.”

Moore and his investor, Nick Regina, told CTV Toronto that the business’s finances became tangled when a previous group of investors pulled out of the diner.

In August he told the Toronto Star that he had put together a detailed business plan for his new venture that garnered him both a bank loan and private equity investments.

He also told the paper that he had sought to lease 1,000 square feet, but could only obtain a lease for the full 3,500 square foot space. However, he said that he had 24 revenue streams to support the venture, including room service to the condo units above.

According to Regina, a new crop of investors have taken interest in Recess and will likely help to resolve the issue within a day.

When asked if both former and current staff will be paid, Moore answered “100 per cent.”

Nooshin Sairafi, who was hired as general manager and whose father was previously hired to lay tiles at the restaurant, said she hasn’t seen a dime from Moore.

“My dad and myself accumulated around $20,000 (in debt),” she said.

On Thursday afternoon, a coffee supplier showed up at Recess to make a delivery and wasn’t surprised to see the door closed.

“I’ve had problems coming here, trying to pick up cheques from them,” the supplier said.

Though the notice of termination previously posted on Recess’ front door has since been removed, it is still unclear when the restaurant plans to reopen.

The landlord of the building refused to comment on this story.

With files from Sean Leathong.