Three weeks after TV host Marcus Lemonis’ deal to buy Bow Truss Coffee Roasters deteriorated, Bow Truss founder Phil Tadros has filed a $26.2 million lawsuit. Tadros accuses The Profit star and his company, ML Food Group, of devising a fraudulent scheme designed to devalue Bow Truss. It’s the latest turbulent chapter for Bow Truss, the Lakeview-based coffee shop chain that’s halted its ambitious expansion plans in the midst of fiscal difficulties.
“By undermining or destroying the plaintiff, the defendants could either purchase the plaintiff at a very cheap price or eliminate the plaintiff as a competitor of the defendants’ coffee business,” the lawsuit stated.
Lemonis signed a letter of intent to buy Bow Truss for $3.25 million in mid-December. The deal fell through, as Tadros’ employees at Bow Truss began speaking publicly on how they weren’t being paid. Lemonis claimed Tadros hid how much debt Bow Truss had accrued and backed out. That led to the closures of all 11 Bow Truss coffee shops in early January. Two have since reopened. The lawsuit alleges Lemonis’ posturing made it hard for Tadros to negotiated with creditors and employees.
On Thursday morning, Lemonis, the co-host of The Profit and CEO of Camping World, responded via Twitter and took a shot at Tadros.
This will be interesting. Hopefully he takes a screen shot of this as well as pays his former employees. Pay your bills Tadros. Honor people https://t.co/OssD3ds8eH— Marcus Lemonis (@marcuslemonis) February 2, 2017
Tadros leaned on the Lemonis deal to give Bow Truss fiscal stability and leadership. His lawsuit claims that Lemonis instead embarked on a campaign spouting falsehoods to the media and via Twitter to embarrass the company and its founder. The lawsuit blames Lemonis for Bow Truss’ closures.
The lawsuit also mentions a Jan. 23 Tweet from Lemonis in which he wrote that he’s bringing his Los Angeles-based coffee business to Chicago. That Tweet demonstrates Lemonis’ motivation to kill Bow Truss to decrease competition, according to the lawsuit.
Lemonis told Crain’s he’ll fight the lawsuit and was surprised Tadros’ attorney consented to filing the case in court. He called Tadros desperate and said he constantly blames his business partners rather than taking accountability for his own problems. Lemonis wants to be rid of Tardros and added that he’s willing to spend $1 million to fight the Bow Truss founder in court. That’s more than the $97,000 he loaned Bow Truss. He also argued that Tadros didn’t know the difference between a non-binding letter of intent and an actual agreement to make a purchase. Tadros felt he had a handshake deal with Lemonis back in early December.
The suit also alleges common law fraud, consumer fraud, tortious interference and breach of fiduciary duty. Tadros seeks $6 million in compensatory damages and $20 million in punitive damages. He also wants the $162,000 break-up fee stipulated in Lemonis’ letter of intent to purchase.
See the full lawsuit below.
UPDATE: Lemonis, on a phone interview, said he wasn’t surprised by the lawsuit, saying that he ignored advise to get into business with Tadros, preferring to listen to his own gut. But the advise proved correct. He also scoffed at the notion that his involvement hurt Bow Truss in anyway.
“It actually gave the employees comfort, I know it gave some of the landlords comfort,” Lemonis said. “I’m not sure if didn’t do anything but give [Tadros] a chance to fight another day.”
He also called Bow Truss’ employees the only asset at the company: “It wasn’t Phil.”
Lemonis is working on bringing a coffee distributor from Los Angeles to Chicago within 90 days and partnering with a local roaster. He won’t disclose names, as that will be revealed on an episode of The Profit.