It would be hard to think of a restaurant that better encapsulated the soul of Dublin in the boom years than Town Bar & Grill at Kildare Street. TB&G opened its doors in November 2004. Partners Ronan Ryan (front of house) and Temple Garner (in the kitchen) met when they worked at Il Primo and earned their stripes in various eateries around town, Cookes and The Mermaid included.

Their vision was modelled on the New York version of Italian food found in restaurants such as Lupo in Manhattan – less traditional red sauce fare and more artistically arranged veal chops – which Ryan describes as "the mother of all Italian restaurants: loud and bustling with staff that looks like they give a s**t".

The unprepossessing basement that had been home to Bruno's was given a stylish €22,000 bargain makeover under the direction of architect John Meagher. Garner sold his motorbike and Ryan borrowed money from his father and sold his car to pay for the opening.

TB&G's ideal customers were "professional couples after a bit of fun. People who didn't give a shit about Jimmy Choos and whether they had the right handbag, but who knew their food and wine and demanded good service".

They came in their droves, because from the word go TB&G delivered on all fronts. The food was good, regulars were recognised when they arrived and given a drink on the house and there was live music that could go on as late as customers wanted. The intention was, says Ryan, "for people to feel that they were treated generously, that they had not been stiffed".

For the first couple of months it was open, in the run-up to Christmas, Town was packed out every night of the week. Things went quiet for a while in the New Year until, in the spring of 2005, the first reviews began to appear and the herd arrived. Business took off again, silencing those who had said that a basement on Kildare Street with no footfall could ever thrive.

"On the contrary," says Ryan. "it suits our customers, particularly the well-known ones, that the place is discreet. They can have a few drinks and get into a cab straight outside the door without anyone seeing them. If we were on Dawson Street and open onto the street we would never have done so well."

By 2006, TB&G had become a canteen for the great and the good of the city and you couldn't get a table on a Friday night for love nor money. At its peak, Town was turning over €4.5 million a year and Ronan Ryan was driving a Ferrari.

It was an obvious next step to start looking around for somewhere else to apply the magic formula.

"People were coming to us with ideas," says Ryan. "All our customers were 'can-do' kind of people. We thought anything was possible, that we could take over the world. We got caught up in it, carried away."

One of the approaches was from Paddy Shovlin, a developer with interests in Beacon South in Sandyford. Large premises originally intended as a crèche had come free. Ryan and Garner agreed the time was right. They borrowed €1 million from the banks for the fit-out of the building as South Bar & Grill.

Problems with a fire cert delayed their opening, but they had already hired staff and, rather than lose them, continued to pay wages while they were waiting to open. They were on the back foot before they even started.

"We opened in June 2007," recalls Ryan. "It was quiet for a couple of months but by October we were doing 250 covers for dinner at the weekends. Three nights a week the place wasn't big enough. But we never quite broke even. And then the recession started for us on 1 July 2008. Over the course of one weekend our turnover went from €65,000 a week to €30,000. And it never came back, not even in the run-up to Christmas. We shut the doors on 23 December.

"We went into Sandyford thinking it was going to be like the meat-packing district in New York. We were going to be the first, and if it had worked I'd have been seen as inspired, prophetic. Once it failed I was the dumbass country boy who opened up a 10,000 square-foot restaurant in an industrial estate."

South drained the resources of TB&G, which continued to trade successfully. In the meantime, Ryan and Garner had been approached by Treasury Holdings, the landlords of what had been Frank's on Grand Canal Street, to open up there, somewhere cheap and cheerful. Bridge Bar & Grill was born. It got off to a good start and the winter of 2007/8 was successful, but then the summer came and trade slackened in the way it does for all neighbourhood restaurants. By the autumn of 2008 TB&G had two ailing siblings to support.

"Without South, Bridge would have been fine because the losses there were manageable and we would have traded through. But we were robbing Peter to pay Paul, falling into arrears. South went into voluntary liquidation with Town its biggest creditor at €670,000. And after Christmas, business at Town had dropped by 10%-15%. We were still busy but people weren't spending as much. Caution had set in. The margins were down and there wasn't enough left over to pay the creditors from South and keep up with the Revenue.

"Suppliers started to panic after the Thomas Read Group failed. Town's bank accounts were effectively frozen by the Revenue and I knew then we either had to go into receivership or find another investor. The problem was that everyone wanted to shut Town down and restart the next day with a clean slate, stuffing the creditors in the process. And if I had allowed that to happen, no supplier would ever have dealt with me again."

The only people willing to support Town in examinership, under which it would be protected from its creditors while a way forward was worked out, were two of Ryan's best customers, Johnny Ronan and Richard Barrett of Treasury Holdings, who agreed to stump up €500,000, €350,000 of which went on paying creditors a percentage of what they were owed and the balance on getting things going again, saving 70 jobs in the process. Twenty-two out of the 30 suppliers owed money wrote letters in support of the petition for examinership, which was approved last week. They are still supplying TB&G. Others went on RTE Radio 1's Liveline to complain and have declined the olive branches Ryan says he has offered. A chef from TB&G goes down the road to Sheridan's cheesemongers each day to buy cheese over the counter. It is, says Ryan, the best in the city.

"We've been lucky," says Ryan. "We have investors who eat here all the time, who know what we're about, who don't want us to cut corners and who will drive business our way. And other restaurateurs have been incredibly supportive – Ross Lewis of Chapter One, Richard Corrigan, Derry Clarke. They all wanted to see us get through it."

For Ronan Ryan personally it has been a hard time, with plenty of sleepless nights and assiduous working of 24-hour banking to stay in the black during the examinership. Temple Garner is not involved in the business any more. Ryan has personal guarantees of almost €400,000 outstanding to the banks and no longer owns any stake in the business he set up.

But customers are coming back to Town, happy to see Ryan is still in charge. Bridge has a new lease of life under general manager Martina Fox; Ryan has held onto his staff and has the satisfaction of not having run away. He can look people in the eye. He is bruised and chastened but he isn't a crook. His pride has taken a kicking but he's still standing. He's driving a 2001 BMW lent to him by a friend. He has a salary. Pamela Flood, television presenter and former Miss Ireland, is still his girlfriend.

Things aren't all bad.

Slim pickings: Other restaurants in crisis

* Mint

Mint closed in April 2009 and is currently in liquidation.

* Locks

Owned by Thrive Restaurants, Locks has been in examinership since 25 August and, after closing for eight days, is trading on a COD basis with its suppliers. Principals Teresa Carr and Kelvin Rynhart, with chef Troy Maguire, are seeking new investors. Liabilities exceed €800,000 on a wind-up basis but as a going concern are said to be €370,000. Barry Lyons of Lyons Kenny acts for Thrive; the examiner is Anthony Weldon of Kieron Kenny Co.

* The Thomas Read Group

The group went into examinership in November 2008 but proposed investors pulled out and it went into receivership in March 2009 after the withdrawal of survival proposals.

* Gary Rhodes' D7

Rhodes D7 closed in 2008 for refurbishment and was due to reopen on St Patrick's Day 2009. It is still closed.

* Jo'burger

Interim examiner Neil Hughes of Hughes Blake was appointed to Jo'burger on 8 September. Owner Joe Macken got into trouble with loans given to two related companies, Orange Square and JJB, which operated a branch in Blackrock, neither of which was successful. The award-winning Rathmines branch continues to trade successfully. In a winding up, a deficit of €770, 000 is estimated.