We have heard many things of late concerning the fate of the Gypsy Tea Room, which is still in Chapter 11 bankruptcy. But, for the moment, we dismiss all rumors and theories and consider only the facts: The club's owner, Whit Meyers, still owes creditors and the government and David Cunniff hundreds of thousands of dollars, at the very least. And Meyers -- who has watched his Entertainment Collaborative collapse with the closing of Trees, the Green Room and Jeroboam — now has a plan to pay them back and keep the Gypsy's doors open. But whether that happens depends on what takes place over the next few weeks.

On January 26 at 9 a.m., the U.S. trustee handling the case, Victoria Tutterrow, and Meyers' Arlington-based attorney, John Leslie, will meet in U.S. District Judge Harlin DeWayne Hale's courtroom. The hearing concerns the Gypsy's disclosure statement, submitted to the court the day after Christmas. In the document, Leslie has laid out precisely how much the Gypsy owes and how much it's worth. In short: It owes a lot, and it's worth, well, not much. Not much at all.

The Gypsy owes the government -- including the Internal Revenue Service, the state comptroller and other tax authorities -- some $90,000 alone. Other creditors are claiming the club owes about $140,000; attorney Leslie's due $40,000 himself. And the club's still on the hook for the Cunniff ruling -- to the tune of $5 million, more or less, says the disclosure statement.

The document also says the club has on hand only some $10,000 in cash. And it estimates the club's assets -- furniture, fixtures and other intangibles, like "business name goodwill" — would be worth only $52,000 if liquidated. "That," Leslie tells Unfair Park, "is a projection of what kind of proceeds would be available for creditors if the business were closed."

So, then, the point of the disclosure statement is to show that it's in the creditors' best interest to keep the club open. Otherwise, they'll never get their bread.

"Yes," Leslie says, "the whole purpose of this is to demonstrate to people that Gypsy believes they would all be better off if they vote for the plan than if Gypsy is closed and the business is liquidated."

According to its plan of reorganization, also submitted to the court in December, the Gypsy would pay off its creditors -- not all of the money they're owed, but at least a percentage (say, in most cases, 15 cents on the dollar). And the plan also shows that the Gypsy's landlords, Westdale Main Ltd., have agreed to give the club a new five-year lease -- but only if the creditors approve the plan of reorganization. And that can happen only after Hale approves the disclosure statement at the end of January.

Should he go ahead and do that, then the reorganization plan will be sent out to the 80 to 100 creditors to whom the Gypsy owes money. They will have about a month to reply. It will go into effect only if -- and this is kinda tricky -- more than half of the creditors agree to it, and two-thirds of them are the folks to whom the most amount of money is owed.

Hale has expressed an interest in taking care of this quickly; we will know the fate of the Gypsy Tea Room by the end of February or the beginning of March, no later. He's waiting first for January 20, when the club is due to turn in its operating report, which will show whether it had a profitable holiday season. If not, he may have grave doubts about the club's viability during months when business is traditionally slower, and he may choose not to approve the disclosure statement because of it.

Hale, the same man who had no choice but to chop down Trees a little more than one year ago, has tried during previous hearings to weigh the Gypsy's importance to the stability of Deep Ellum; he's tried to consider the impact its closing would have. He wants it to work, perhaps almost as much as Whit Meyers does. But at some point very, very soon, he and the creditors will have to determine whether a return of 20 cents on the dollar is a good investment in a neighborhood still in decline.

"Now, there may be several mean-spirited people in the world who would rather see the Gypsy Tea Room dead than alive," Leslie says, "but everyone from the judge on down wants to give Gypsy a chance to reorganize." --Robert Wilonsky