Tadros sues Crain's, demands $38M for alleged defamatory 'hit piece' article

By Scott Holland | Jul 12, 2017

Editor's note: This article has been updated to more accurately reflect the current status of other pending litigation involving Philip Tadros and Bow Truss Coffee.

Bow Truss Coffee founder Philip Tadros is back in court, now seeking $38 million from Crain’s Chicago Business in a self-filed defamation lawsuit over a July 2016 Crain’s article he called a “hit piece.”

Tadros, already engaged in legal battles with business partners and employees, filed the most recent complaint July 7 in Cook County Circuit Court. He named as defendants Crain Communications, Inc.; Keith Crain, Rance Crain, KC Crain and Christopher Crain, the family members who run the business and weekly publication, as well as editor Michael Arndt, reporter Peter Frost and former Crain’s publisher David Snyder.

Tadros is representing himself in the action, according to Cook County court records.

The article in question was published under the headline: “One of Chicago’s most connected entrepreneurs has made more than a few enemies.” Tadros said Crain’s, with a print circulation of more than 50,000 and more than 2.2 million online page views per month, used “the most salacious information they could find” and marketed the pieced as a special report to draw more attention.

Frost’s article ran in the July 9, 2016, edition. In November Tadros sued investor Alan Matthew, alleging defamation for comments he made in the piece. In that complaint Tadros said the article “was written with reliance on Bow Truss’ confidential financial and accounting information. Only a Bow Truss officer or investor would have had access to this information.”

In accusing Crain’s of defamation, Tadros said the article was conceived as a “hit piece” and said placing it on the front page underscored the commitment to making him look bad. The complaint highlighted Tadros’ objections to the article, including assertions he lived a luxurious lifestyle while his businesses underperformed, “has a knack for burning through other people’s money” and employs “questionable accounting practices,” while allegedly implying he violated Securities and Exchange Commission rules about public offerings.

Tadros said Frost interviewed him for the piece and also noted he communicated with Arndt and Snyder before publication “to address the several inaccuracies and misrepresentations.” However, he said they were content to base the piece on sources, including anonymous ones, whom they “knew had a pre-existing bias” against Tadros, he alleged.

In addition to Bow Truss, Tadros is involved with ventures like Doejo, Aquanaut Beer Company, Budlong and Funded Foods. Earlier this year, Bow Truss workers walked off the job to protest unpaid wages, forcing Bow Truss to close its 10 locations. Later, 10 former Bow Truss employees filed a Cook County Circuit Court complaint against Tadros and co-owner Darren Marshall, alleging violations of various federal and state wage and hour labor laws. That case has since been removed to federal court, where it remains pending. In court filings there, Tadros has denied the employees' allegations. In an emailed statement to The Cook County Record, Tadros said: "Everyone has been paid." 

Federal court records indicate Tadros is represented in that case by attorney Lance Ziebell of Lavelle Law, of suburban Palatine. The worker plaintiffs are represented by Cameron & Kane LLC, of Chicago. 

The employees' lawsuit came about a week after celebrity investor Marcus Lemonis countersued Tadros in response to a $26 million suit Tadros had earlier brought against Lemonis, accusing Lemonis of trying to devalue Bow Truss so he could buy it. Tadros' lawsuit further alleged Lemonis attempted to destroy Bow Truss altogether when the sale fell through. In May, a Cook County judge dismissed Lemonis' countersuit, and granted Tadros the chance to amend his complaint and continue his action against Lemonis. Tadros' lawsuit against Lemonis remains pending, Cook County records show. 

Cook County court records indicate Tadros is represented in that action by attorney Marty J. Schwartz, of Chicago. Lemonis is represented by attorneys from Neal, Gerber & Eisenberg LLP, of Chicago. 

Tadros alleged some of the people quoted in the Crain’s piece contacted him after publication to report their remarks were taken out of context or otherwise misrepresented. He said the magazine had limited financial documents on which to base its assertions about his overall portfolio and “intentionally, or at least recklessly, jumped to unfounded conclusions based on incomplete records.”

Formally alleging defamation, false light, intentional interference with business expectations, intentional interference with contract and intentional infliction of emotional distress, Tadros wants a jury trial and seeks compensatory damages of at least $38 million. He also wants punitive damages and to have the court to order a retraction of the article.

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Bow Truss Coffee Roasters Crain's Chicago Business

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