Patrick Liang was in the middle of inking a snake and rose forearm tattoo on a client earlier this year when he got the news. During a break, he checked his phone and saw a text message sent to an all-staff group chat from one of his bosses. Ink & Water, the popular tattoo shop on Campbell Avenue in the city’s west end, would be closing immediately and artists had to clear out their things by the end of the next day.
“It was a really confusing situation,” he said.
Staff replied to the May 14 text in a flurry, asking why the shop needed to close, and if it had to be so soon, could they not wait a couple of weeks to reschedule their clients? But no answers came, Liang said.
Ink & Water Tattoo was one of the biggest names in the business in Toronto. The shop employed some of Toronto’s most popular tattoo artists, who boast hundreds of thousands of Instagram followers. The shop hosted artists from around the world for guest stints at their locations and had a highly sought-after mentorship program for apprentices.
At a January 2024 staff meeting, it certainly didn’t seem like the shop would soon close. A new artist had just been hired, and as Liang and other artists knew, the store should have been relatively easy to keep afloat. There was little overhead, aside from rent, and the commission-based artists were contractors who brought their own equipment, artists said. The model seemed to be working.
But, artist Kelly Iisye said, “We weren’t aware of the debt.”
That debt allegedly amounted to more than $1 million, but that wasn’t all. There was the alleged misappropriation of at least $1.6 million by one of the three co-directors of the corporation as well.
The Campbell Avenue building in the city’s west end that once hosted popular tattoo shop Ink & Water.
R.J. Johnston Toronto Star
One of the three co-directors, Michael Pecherle, said in an interview with the Star that he did all he could to try to save the business after the two other co-directors abandoned it and left him to discover the dire financial situation. Another director, Prairie Koo, said Pecherle pushed him out while he was trying to save it, and he could have saved it — if it weren’t for Pecherle. And both Pecherle and Koo lay the blame for the initial financial mismanagement on the third co-director, Harris Mirza.
Meanwhile, former staff, some of whom say they are still owed paycheques, and Koo, sling allegations and insults at Pecherle on Instagram, while they say they are unable to reach Pecherle in their attempts to get answers and back pay.
For the co-directors, Koo and Pecherle, who had been friends when they graduated from the Ontario College of Art & Design together eight years ago, running a business together was more complicated and unpredictable than they had imagined. Looking back, Pecherle said that they had no formal business plan and wondered if they took on too much too fast.
“I really loved tattooing,” Pecherle said. “And I just don’t know if that necessarily meant that I was a business person.”
At its height, Ink & Water operated as a corporation with three locations, one in Toronto at Dupont Street and Lansdowne Avenue, one in Mississauga and one in New York City, which remains open under separate ownership.
In 2016, Koo, Mirza and Pecherle opened the first Ink & Water location at Bloor Street West and Lansdowne Avenue, back when they were in their early- to mid-twenties. They wanted to create a welcoming environment, different from the “dive bar” esthetics most stores had at the time. They created an atmosphere that was sleek, minimalist, that made clients want to take photos in and post about on Instagram. They became known for the diversity of styles available from their impressive roster of talented tattoo artists and, above all, the high quality of their work.
To open a shop “all you really have to do is be able to pull up money for first and last and then be able to pay rent,” Pecherle remembers thinking at the time. The value of the business was in their people, branding and environment. Pecherle was 23 at the time, and had been a tattoo apprentice for less than a year. He was eager to work hard and establish himself as an artist, proving to everyone and himself that he could make a living tattooing.
“I really wanted to prove people wrong,” he said.
At that time in 2016, tattoos were soaring in popularity, no longer just the domain of sailors and bikers. As of this year, 33 per cent of Canadians have at least one tattoo. The global tattoo market is currently valued at more than $2 billion (U.S.), and is expected to double to $4.8 billion by 2032.
Before the pandemic, Ink & Water was bringing in “millions” in revenue every few months, Koo and Pecherle said.
But running a business was “lessons stacked on lessons,” said Pecherle, who had no previous business management experience or education. He was trying to learn by doing.
In 2020, a staff member made a comment online that certain tattoo colours wouldn’t work on dark skin, a common misconception in the industry. Hundreds of tattoo aficionados took to the social media pages of the shop and staff, accusing them of racism. There were even some death threats. The owners made a public apology and held anti-bias workshops for staff. But the intensity of the backlash they’d received alarmed Pecherle and Koo.
“It’s difficult to pour your heart into something and then get hated by the same group of people,” Pecherle said.
The friendship between him and Koo became strained and “toxic” over the years, said Pecherle. Koo said he also began experiencing health issues around this time.
In response to Pecherle’s characterization of their relationship and the failure of their business, Koo said he wishes he’d been the sole owner.
“My reflection and learning is don’t trust someone with a business you started,” Koo said. “People are greedy and even if you are nice and give them everything, they always want more.”
Pecherle said he didn’t enjoy being a manager. He was 23, managing a team of people who were older than him, and was focused more on working hard than having empathy, he said.
“I’m no ace,” Pecherle said about his years managing a team of staff. “At that time, I wouldn’t have liked me either,” he said.
The online hate and disintegrating friendship took the joy out of their work at their shops. Koo and Pecherle stepped away in 2020. They became “silent partners,” meaning they were not involved with daily shop operations, and transitioned all managerial duties to Mirza, they said. It was a choice Pecherle said he felt good about. The business had a couple hundred grand in the bank, and he and Koo had full trust in Mirza to run the daily operations.
“We knew he was a dog, he would work hard,” Pecherle said.
“And then we come back (to help run the business), get this call and find out we are (more than) $1.5 million in debt. And just lies after lies after lies.”
The Star attempted to reach Mirza by phone, text and in person at his home in Brampton, but he could not be reached for comment.
In August 2023, Koo looked at Ink & Water’s books and was alarmed.
“Money was missing and misused,” Koo told the Star.
The three co-owners met at the Campbell Avenue shop. Koo confronted Mirza, accusing him of stealing from the business, recalled Pecherle and Koo. Mirza got emotional, Pecherle recalled.
Signage on the directory of the building on Campbell Avenue where Ink & Water once operated.
R.J. Johnston Toronto Star
Pecherle then decided to return to the company as acting manager “to try to fix and understand the financial mess,” he said in a statement sent to staff shortly after the shop folded.
Mirza resigned his role as an officer and director of the corporation in January 2024, according to documents provided by Koo.
Pecherle hired a lawyer and a forensic accountant. He shut down the company’s Mississauga location in early 2024, and changed the company’s pay structure to try to save the business money. Instead of receiving commission, artists paid a monthly rent to Ink & Water, and kept all of the income from their tattooing. But by May 2024, “it became apparent that the damage to the business was irreparable,” he wrote in the statement to staff.
“We found out that the records had not been kept up to date and the business was in significant debt.” There was also evidence of “suspicious transactions” and “unpaid loans.”
Pecherle said his accountant found more than half a million dollars in unpaid COVID-19 pandemic relief loans — loans Pecherle alleges he was unaware of — and more than $600,000 in HST owed to the government. (The Star has not seen the accountant’s report.)
In the statement to staff, Pecherle provided few details to explain what the allegedly mismanaged money was spent on or where it went.
The statement did say that more than a million dollars in transactions had taken place, and there were no details to explain what that money was spent on or where it went. The accountant considered that money lost or stolen, the statement said.
Pecherle said he had borrowed more than $130,000 to chip away at the massive debt. He declared the business bankrupt and declared personal insolvency.
“If you feel abandoned, cheated or angry, please know that I share your sentiments. While some of you have lost money because of this horrible tragedy, I have too, tenfold,” said Pecherle at the end of the statement to staff. “The financial and social repercussions will follow me for years to come, all due to a betrayal by someone I trusted deeply with friendship as well as my business.”
Meanwhile, some artists who had worked at the shop wondered where Koo was. Some said online that Koo had “vanished” to Hong Kong. Koo said this is not true, that he was pushed out by Pecherle and had moved overseas for family and health reasons.
Koo said he had been “hands off” of the business since the beginning of the pandemic, then returned part-time in 2023 and discovered issues with the finances. “I wanted to deal with it and take over the business,” said Koo, but then, in his view, Pecherle “got greedy and decided he wanted it, so I walked away.”
Now that the corporation has declared bankruptcy and Pecherle, its sole remaining director in Canada, has filed for personal insolvency, there are no obligations to repay any of the debts owed.
From a practical perspective, this means Ink & Water Tattoo is dead.
Because it was created as a corporation, it is considered to be its own entity. The three owners are legally separated from it, unless they had previously signed a personal guarantee, which would make them liable, said Brad Poulos, a lecturer in entrepreneurship at Toronto Metropolitan University. Pecherle said they did not sign any kind of guarantee.
“When you’re a shareholder of a corporation, your liability is limited only to your investment,” Poulos said.
Directorships are kind of like musical chairs, Poulos said. The last one can’t resign. When things go bad in business, directors tend to be in a rush to resign, lest they be the last standing and solely responsible.
The business is now bankrupt and shut down. Because Pecherle declared personal insolvency, his is not liable for repaying the government-owed HST. Koo and Mirza have not filed for bankruptcy or insolvency as of Wednesday. Koo said he is unsure if he resigned as a director. Pecherle said he did not resign, to his knowledge.
Koo said Pecherle hired lawyers who bullied him by questioning his money-management practices, his ideas for how to save the business were not heard and that Pecherle pushed him out.
“If I was in hiding I would not be on social media,” Koo told the Star. “I’m in Hong Kong and I show everyone where I am.”
Pecherle said he has been left to clean up the mess, as the last remaining director in Canada, and stand in the line of fire from employees seeking money they earned but was never paid to them.
An Instagram post by former staff member Mumi, who goes by her first name only, and shared by some former staff, said they are collectively owed “at least” $52,000 by Pecherle. Pecherle should have announced the closure in advance, refunded clients and paid employees, the post said.
Mumi said when she joined the Ink & Water team, the only two things she cared about were having a place to work and creating her art.
“With this experience I learned tattooing is still a business, and as an employee I should have paid more attention to know my rights so I could protect myself better,” she said.
