Chef and restaurateur Paul Heathcote has expressed "surprise" at a ruling in Preston Magistrates Court that saw him fined £3,000 ordered to pay more than £7,000 in compensation for ignoring a trading ban.
He also claimed that press reports of the news had been "hurtful" and "damaging" to his business.
The 43-year-old chef reportedly faced 30 charges under the VAT Act brought by HM Revenue and Customs.
The court heard that Heathcote attracted the attention of HMRC after he de-registered his previous company, The Longridge Restaurant, for VAT in 2011, allegedly owing more than £100,000 in unpaid taxes.
One the same day he registered two new companies - PH Restaurants (Longridge) and PH Restaurants (Preston).
HMRC said that because the new companies posed a risk, he should pay a VAT security of £72,190 up front before being allowed to trade. But both restaurants continued to trade for three months after the ban was imposed.
Colin Spinks, assistant director, Criminal Investigation, at HMRC, said: "Mr Heathcote was given numerous opportunities to continue trading legitimately, but he chose to flout the law. We will take action to ensure the correct tax is paid and investigate those who are subject to a trading ban because they owe VAT."
But in a statement this morning, Heathcore said: "The result and subsequent press release on behalf of HMRC took me by surprise.
"If anyone had cared to be in court the picture painted and the summary presented would have been very different.
"It is unfortunate for me and our small but not insignificant team of 35 that the picture painted by the press and other media has been hurtful and damaging to the business.
"The recession has had a tough impact on many companies; the resulting closure of the Longridge Restaurant was unfortunate and sad. It had provided many celebrations, recognitions and work experiences for thousands of people; it still provides many memories for staff and customers alike. I am very proud of its achievements.
"Its losses and subsequent tax demand was a bridge too far for the other restaurants to support it at the time of its closure.
"Anyone reading the reported case in the many column inches or listening to reports in the media could have immediately formed a fairly jaundiced view of the outcome and whilst none is untrue the summary and result took into account our 22 years of exemplary business dealings, immense community and charity works and confirmed that both the Olive Press and Heathcotes Brasserie had traded in accordance with HMRC's requirements other than during the 3 months stated.
"The challenge for any business in good times is not too dissimilar to the bad times; cash is always king is an old business saying and unfortunately cash for everyone in the last five years has been difficult.
"The business has been no exception and attempting to place a strong and valid argument with the banks to loan monies to pay directly to HMRC in advance of any taxes that were due, on top of paying those generated was an impossible position in the economic climate.
"The Act on which HMRC based Wednesday's court case was introduced in 1994. I believe I am only the second person ever to be prosecuted under this ruling, or at least according to the unanimous understanding of the prosecutor, defence and judge.
"The difficulty the law created was that the requirement to lodge the bond was only issued by HMRC once trading and VAT payment had begun.
"The re-opening of the Preston restaurant was followed six months later by the requirement to lodge the bond.
"It came out of the blue and was a nasty surprise.
"It raised the cash is king issue, at that time the business could not afford the sum demanded.
"The judge took all this into consideration, having been advised that The Olive Press and Heathcotes Brasserie had paid nearly £1 million of wages in this period of time keeping many people employed, and generating taxes that had clearly always been paid promptly and on time. In addition the court was aware that I had not taken a salary from this business and that I had supported it through my pension and personal borrowings this helped and assisted it in its growth. I am still doing this.
"In addition the court acknowledged my strong community work and my dedicated charity involvement which has raised millions and has continued undiminished during this time.
"The court recognised that weeks before the case was determined that I had paid the bond and that I had also suggested a payment of compensation to HMRC. I was determined to pay every penny due.
"I had offered a sum over £6,000 above that which HMRC sought and have recovered.
"In conclusion I never disputed or hid from the fact that at a time of financial stress the business had traded without the bond.
"As soon as they asked me I admitted this back in the summer and this was the reason HMRC decided to prosecute without further discussion. I did what I did for the loyal team many who have served the business over many years and who are now still earning a living in this employment.
"The £3,000 fine imposed represents 2% of the potential penalty that could have been imposed. I believe this was on balance a fair price to keep good people gainfully employed.
"I still feel strongly that there was no necessity to bring the matter to court and further dialogue would have produced the same conclusion without wasting valuable time and tax payer's money."