A celebrity vegan chef has filed a $150 million lawsuit against Pryor Cashman, claiming the law firm aided an attempt by her former business partner to steal her ownership stake in the restaurant chain that bears her name.
The 21-page complaint, filed Friday in New York County Supreme Court, stems from the 2017 acquisition of vegan chef Chloe Coscarelli’s 50% ownership in By Chloe, a fast-casual vegan restaurant, by ESquared Hospitality, Pryor Cashman’s client, for zero dollars.
Coscarelli, through Chef Chloe LLC, challenged the acquisition as being legally improper. Last year, an arbitrator reinstated Coscarelli’s 50% ownership stake in By Chloe and awarded her $2.3 million in attorney fees and costs.
Pryor Cashman has argued that the 2020 arbitration award is not effective until it has been confirmed by a court, putting it at odds with its position in 2017, when it cited an unconfirmed arbitration award as a basis for ESquared Hospitality’s no-cost buyout.
“Under either scenario, Pryor Cashman has acted in bad faith and outside any honest efforts to protect ESquared Hospitality and its subsidiaries, but rather in an intentional manner to harm Chef Chloe,” the lawsuit said.
Chef Chloe said it is seeking $37.5 million in compensatory damages and $112.5 million in punitive and exemplary damages. The lawsuit asserts a single claim – that Pryor Cashman aided and abetted ESquared Hospitality’s breach of fiduciary duty to Chef Chloe.
Ronald Schutz, a Robins Kaplan partner who chairs the firm’s executive board and is representing Chef Chloe, declined to comment.
A spokesperson for Pryor Cashman blasted the lawsuit in a statement.
“The claims made by Ms. Coscarelli’s company are utterly baseless and devoid of any merit,” the spokesperson said. “At minimum, this lawsuit is unjustified and worse is the result of audacious but contrived lawyering. We stand firmly against these claims and look forward to our day in court.”
The total damages Coscarelli is seeking — $150 million — represents twice the immediate financial injury Coscarelli said she suffered in the 2017 buyout by ESquared Hospitality.
Coscarelli’s efforts to get the 2020 arbitration award confirmed hit a roadblock in December when By Chloe filed for Chapter 11 bankruptcy in Delaware.
The bankruptcy filing led to U.S. District Judge Jesse Furman holding off on ruling the arbitration award in January. Proceedings are still pending before him in Manhattan federal court.
The case is Chef Chloe LLC v. Pryor Cashman LLP, New York County Supreme Court, Index No. Unassigned.
For Chef Chloe LLC: Ronald Schutz, Carly Kessler and Patrick Arenz of Robins Kaplan LLP
(Note: This story has been updated to include a statement from Pryor Cashman.)
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