Less than three weeks after being targeted in a $26 million lawsuit over a soured acquisition, celebrity investor Marcus Lemonis has countersued his erstwhile business partner, Chicago businessman and the founder of Bow Truss Coffee, Phil Tadros. 

Lemonis filed his counterclaim Feb. 17 in Cook County Circuit Court against Bow Truss, a Chicago coffee retailer run by Tadros. Lemonis appears on of CNBC’s “The Profit,” a business investment show, and operates ML Food Group, LLC, which is a third-party plaintiff in a claim against Tadros, a third-party defendant, incorporated with the countersuit filing. 

In his original complaint, Tadros accused Lemonis of devising “a fraudulent scheme” late in 2016 and early in 2017  to buy Bow Truss “at a rock bottom bargain basement giveaway price” and then to “destroy” the business when it wouldn’t sell. His accusations centered on a Dec. 15 letter of intent to purchase the business and the transfer of funds leading up to closing of the sale, which never took place as Tadros rejected Lemonis’ requested purchase price adjustment. 

Lemonis’ countersuit accuses Tadros of withholding information he requested regarding Bow Truss operations and financial condition. He said ML Foods discovered “Tadros did not personally have any ownership interest in Bow & Truss; Tadros lacked the ability to execute either the letter of intent or the secured promissory note on behalf of Bow Truss; Bow Truss was in much worse financial condition than had been represented by Tadros and did not have the ability to pay its employees, vendors, landlords and other of its creditors, even after the additional advance of almost $100,000,” among other accusations. 

According to the countersuit, Bow Truss sometimes failed to pay employees, or “underpaid them by utilizing a portion of their pay to cover expenses that Bow Truss was obligated to cover.” Further, assets Tadros said Bow Truss owned actually were owned by another Tadros entity, identified as DoeJo LLC. Lemonis also said Tadros used $50,000 advanced by a Bow Truss landlord for facility improvements on other purposes. 

When Tadros failed to acknowledge the ownership situation in a Dec. 29 promissory note amendment, Lemonis said Bow Truss effectively defaulted on the contract. Attorneys sent a notice of default letter Jan. 13, a day after Bow Truss employees walked off the job, closing stores for a week. 

In his complaint, Tadros alleged Lemonis encouraged the employees to walk and also said he suggested landlords file involuntary bankruptcy claims against Bow Truss. 

However, the countersuit said it was Tadros or other Bow Truss officials who “disclosed to Crain’s Chicago Business the existence of the secured promissory note and that Bow Truss had received a loan from” Bow Truss America LLC, the company Lemonis formed to assume ownership of Bow Truss. That led to a Crain’s article on the walkout and the loan of nearly $100,000 Lemonis extended to keep the shops open while the “two sides entered into a due diligence phase on the proposed deal.” 

Lemonis’ countersuit includes a count of fraudulent inducement, rescission of the letter of intent, breach of the secured promissory note. He seeks actual damages and punitive damages worth three times the actual damages, including a repayment of $97,394, plus interest, based on the terms of the promissory note, as well as legal expenses. 

Representing ML Food Group are attorneys from Neal, Gerber & Eisenberg LLP, of Chicago. 

Representing Bow Truss in the matter are attorneys from Schain Banks Kenny & Schwartz, of Chicago.

 

More News