Lawsuit dishes out allegations of embezzlement against chefs, investors of The Purple Pig

By Jonathan Bilyk | Dec 2, 2014

Some of the driving forces of Chicago’s culinary scene are embroiled in a legal fracas over the fate of their joint venture, The Purple Pig, after one of the founders filed a lawsuit last month that accuses his partners of embezzling revenues, manipulating records and cutting him out of management at the popular North Michigan Avenue restaurant.

On Nov. 20, Scott Harris, chef and one of the founding partners of The Purple Pig and longtime owner of the Mia Francesca restaurant chain, filed suit in Cook County Circuit Court against fellow restaurateurs and partners Jimmy Bannos Sr. and his son, Jimmy Bannos Jr., and Anthony Mantuano. He also sued investor Gary Veselsky, the restaurant's general manager Laura Payne, and Prairie Bread Kitchen.

Among other demands, Harris has asked the court to award him $1.5 million in damages, including $1 million in punitive damages, order a full audit and accounting of The Purple Pig’s books and records, and to remove the Bannoses from ownership and management of the restaurant.

The suit brings to a full boil a years-long simmering dispute among the partners, who collectively have received acclaim for their culinary skills and successful eateries, written cookbooks and appeared on television programs.

Since 2008, Harris and Bannos Sr. have been partners in establishing and running The Purple Pig. Located at the corner of North Michigan Avenue and East Illinois Street, the River North establishment specializes in offering Mediterranean-themed cuisine centered on “cheese, swine and wine.”

Eventually, they added Mantuano to the venture, further bolstering the culinary credibility of the new restaurant, which brought together the chefs and owners of Chicago dining institutions Mia Francesca, Heaven on Seven and Spiaggia.

The restaurant opened in 2009, under an ownership split awarding 40 percent ownership stakes to Harris and Bannos Sr., and 20 percent to Mantuano.

The partners soon added Bannos Jr. to the restaurant staff as chef, despite Harris’ alleged misgivings over Bannos Jr.’s perceived lack of experience in restaurant management, and awarded Bannos Jr. a 5 percent ownership stake, reducing Bannos Sr.’s stake by 2 percentage points, and Harris’ and Mantuano’s by 1 percentage point each.

A year later, however, and allegedly without Harris’ approval, Bannos Sr. added Veselsky to the partnership by awarding him a 5 percent stake that reduced his cut to 32 percent.

And in 2013, the partnership was adjusted again, giving Bannos Jr. an additional 3 percent stake, again pulled from among the three primary partners, according to the suit that alleges Harris was again not consulted.

The situation didn't really heat up in spring 2014, when Harris said he suspected misdealings at the restaurant and attempted to investigate.

Harris claims his investigations have led him to believe the Bannoses have embezzled Purple Pig operating revenues and used business credit cards for their own personal use, allegedly including home repairs; personal vehicle expenses, including parking tickets; an engagement party for Bannos Sr.’s daughter; personal health insurance; “abusive spending” at an awards ceremony in New York; personal computers; and vacations, among other items.

In his lawsuit, Harris also alleges a kickback scheme, in which the Bannoses attempted to conceal revenue from taxation by paying “bonuses” to Payne and making fake purchases from Prairie Bread, a business owned by Payne’s husband.

Harris further contends his partners manipulated employee time records, manually reducing hours worked to avoid paying overtime, potentially exposing the restaurant to lawsuits from employees and regulatory action.

Since early 2014, when he claims he began voicing concerns over the alleged misdeeds, Harris said the other managing partners have moved to freeze him out of The Purple Pig’s books and management, preventing him from learning whether his allegations are correct, and, if so, what the full extent of his partners’ actions.

Harris' suit was submitted by Spencer J. Marks, Jonathan D. Rosen and Brian F. Gruber, of Pokorny & Marks in Chicago.

Court records show the law firm of Chuhak & Tecson entered an appearance on behalf of Bannos Sr. on Nov. 25, the day before a judge denied Harris' requests for an injunction and temporary restraining order. It appears a status hearing has been set for Dec. 18.

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