Summary: Coffee company Bow & Truss is suing Marcus Lemonis and his company for $26 million in what they claim was a fraudulent scheme to ruin their business.
Chicago coffee purveyor, Bow & Truss LLC is blaming a celebrity investor for their financial troubles in a five-count complaint filed in Cook County Circuit Court. The $26 million complaint filed against Marcus Lemonis, television personality and investor, and his company ML Food Group, LLC.
The suit claims that Lemonis, of CNBC’s business investment show, “The Profit,” planned at the end of 2016, beginning of 2017 to “devise a fraudulent scheme” which would allow him to buy Bow Truss “at a rock bottom bargain basement giveaway price.” When the company refused to sell, they claim he sought to “destroy” the business.
In the complaint, Bow Truss says that Lemonis had secret shoppers visit their retail outlets to interview employees. Bow Truss signed a letter of intent on December 15 with Lemonis. He immediately posted on Twitter that he had purchased Bow Truss and was now the chief executive officer. The letter did not state that consummation of the sale was binding but it did have other binding obligations. The lawsuit states, “Lemonis never was and never became the CEO or held any other position.”
A week after the letter was signed, Lemonis advanced $97,000 to Bow Truss and its creditors, with plans to wire more before the sale was complete. Bow Truss used money set aside for payroll and employee health insurance to pay their creditors, assuming they would receive more from Lemonis to pay their employees with. Another week later, Bow Truss requested $180,000. He held a meeting a week later with Bow Truss employees to announce himself and ML Food Group as the new owners, all without the consent or knowledge of Bow Truss.
They claim that Lemonis also approached their landlords to state his firm would take over the leases. Just a few days later on January 6, Lemonis was going to wire money but two hours before that he contacted Bow Truss founder Phil Tadros saying he would not wire the money unless the purchase price was dropped significantly. He also demanded “the sole member of the plaintiff pledge its membership interest…as collateral for the funds advanced and being advanced.”
Bow Truss rejected the offer so Lemonis did not wire the money. The company could not make payroll. Lemonis took to social media and reporters, claiming accounting irregularities with Bow Truss and overstating their financial liabilities. Lemonis announced he would no longer be partnering with Bow Truss. Employees walked off the job at Lemonis’s encouragement and he suggested to the landlords that they file involuntary bankruptcy claims against the company. Boss Truss had to close their stores for a week.
ML Food Group announced on social media that they were bringing their California coffee business to Chicago and also stated that Bow Truss was behind on payroll.
The allegations against Lemonis include breach of letter of intent, common law fraud, consumer fraud, tortious interference, and breach of fiduciary duty. They seek $162,500 for the breach of intent, reimbursement of legal fees, $6 million for compensatory damages, and $20 million for punitive damages.
Do you think Lemonis overstepped his authority and role in the agreement? Tell us in the comments below.
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- Texas Lawyer Suing Starbucks for Too Hot Coffee
Photo: fullnetworth.com