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Operating without a state liquor license for just two months has cost Salt Lake City's Lamb's Grill at least $40,000 in profits and has put the venerable restaurant on the verge of closing, its co-owner says.

"We are hanging by a thread," Wayne Barlow told members of the state liquor commission Tuesday. "I've put all of my available retirement resources into the business and any additional financial burden could be the end of Lamb's."

One of the oldest restaurants in the state — and known for its antique wooden bar — Lamb's Grill was told it needed to stop serving alcohol in early October after it failed to inform the Utah Department of Alcoholic Beverage Control (DABC) that the majority ownership had changed in June 2014.

Troubles for the Main Street eatery continued Tuesday when the state liquor commission voted unanimously to impose a $9,000 fine on the restaurant for failure to comply with the state's Transfer of License Act.

Considered a "grave" violation, it comes with fines ranging from $9,000 to $25,000 and/or a license suspension of up to 15 days.

While the commission was sympathetic, members said imposing the fine was necessary to maintain consistency.

"There's not a person on this commission that doesn't want Lamb's to be successful," commission chairman John T. Nielsen said after the vote. "However your situation is not unique. We've had other situations like this where the new owners have failed to communicate with [DABC] staff."

In August, for example, the DABC fined Gordon Biersch Brewery and Cat Cora's Kitchen, both at Salt Lake City International Airport, $10,000 each for failing to report ownership changes.

Sheila Page, the DABC's legal counsel from the Utah Attorney General's Office, maintained the Lamb's Grill fine was appropriate. "Considerable profit was being made," at Lamb's in the 18 months it operated without the proper license, she said.

There was some good news for Lamb's: the commission approved its application for a new full-service restaurant license, which will allow it to serve beer, wine and spirits to customers who order food. Once Barlow pays the $9,000 fine and compliance officers sign off on the restaurant's new "Zion Curtain" enclosure, Lamb's will be able serve liquor legally. Barlow expected that to happen by the end of the week.

Lamb's Grill was previously exempt from having the 7-foot-tall barrier because it had a liquor license before 2009. That's when a state law took effect that mandated all new restaurants have a room or barrier — aka a "Zion Curtain" — to shield patrons from seeing the mixing and pouring of alcoholic beverages. When Lamb's lost its license, it was reclassified as a new restaurant and required to build a "Zion Curtain."

A private room in the middle of the restaurant has been enclosed with opaque glass and will be used for the mixing and pouring, Barlow said.

Lamb's opened in 1919 in Logan and moved in 1939 to its current location at 169 S. Main St. in Salt Lake City. Francis Liong and his wife, Joan Barlow, took over the operation in 2011. After the couple divorced in 2014, Barlow and her father, Wayne, bought out Liong's equity. The Barlows have said they believed that Liong submitted the proper ownership papers at the time of the sale. But that was not the case.

"It's an unfortunate situation," Barlow's attorney, Tanner Strickland Lenart, told the board. "While ignorance is not an excuse, it is an explanation. It's something that never would have happened if Mr. Barlow had been aware of the situation."

Under state law, a liquor license does not automatically transfer to new business owners. Before any sale, potential owners must contact the DABC, which requires, among other items, a criminal-background check and financial review to ensure there are no delinquent taxes. If those measures are not in place when the sale is made, the license is automatically forfeited.

DABC compliance officers learned about the ownership change at Lamb's at the end of September when the restaurant submitted its annual renewal application and fee. The restaurant was told it was operating without a valid liquor license and needed to suspend sales immediately.

Wayne Barlow said without the ability to sell wine, beer and spirits, Lamb's Grill lost about $12,000 in October and $13,000 in November. The business lost another $15,000 when groups canceled their private parties because alcohol could not be served.

He said Lamb's also hoped to become a go-to spot for fans attending shows at the new Eccles Theater just a few doors to the north. The theater's grand opening was Oct. 21.

"It's cost us a minimum of $40,000," said Barlow, "and it's hard to estimate the additional loss when patrons walk in and then turn around and leave when they learn we can't serve alcohol."