In late 2017, Brookhaven passed a law that would have raised the fees for alcohol permits from $6,000 to $100,000 for nightspots and prohibited them from serving liquor on Sundays, a usually busy night. The three nightclubs that cater to a primarily black clientele sued in federal court, accusing the city of racial discrimination and infringing on their civil rights.

A judge issued an initial ruling in the clubs' favor in July, saying that the city was not treating all nightspots the same and therefore the law was likely unconstitutional. Brookhaven eventually rolled back those rules, and both parties recently agreed to dismiss that lawsuit.

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Around that same time, this new controversy had taken hold. The city says that it ordered an audit of every club and restaurant serving alcohol to determine if the proper amount of taxes on liquor sales had been paid over a roughly two-year period.

Out of 77 businesses, the city initially said in December there were issues with 13. After some discussions, a few of the restaurants proved they had paid the correct amount in taxes and others paid up after agreeing on what is owed.

The owners of Hudson Grille, for example, requested a hearing to challenge the city’s conclusion that they have about $10,000 in back taxes. A hearing officer has yet to rule on that case.

Brookhaven also said the Pink Pony strip club owed $80,237.72 and tried to put the venue on a payment plan. Because the club's owners have filed for Chapter 11 bankruptcy, the city must go through the courts to see if they can recover unpaid taxes.

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XS, Medusa and Josephine did not dispute the amount Brookhaven says they owe, and Chapman said they can no longer file an appeal about the tax bills. But the clubs can appeal the city’s decision to suspend their liquor licenses.

Attorney Cary Wiggins, who represented the clubs in the previous lawsuit against the city, said Tuesday that he cannot comment on whether the clubs will appeal the suspension, pay up by the April 26 deadline or file a lawsuit if the city revokes their liquor licenses.