Marcus Lemonis has filed a counter lawsuit against Phil Tadros, accusing the Bow Truss founder of hiding financial details about the company as Lemonis negotiated to buy the coffee shop chain. The lawsuit comes as Tadros has put the original Bow Truss location in Lakeview—and the space the formerly housed Bunny, The Microbakery and the original Budlong Hot Chicken—up for lease. The new lawsuit, filed on Feb. 17, also accused Tadros of misappropriating money Lemonis loaned to Bow Truss for purposes other that those stipulated in their purchase agreement.
The gloves came off fast in this lawsuit thanks to some pointed language:
“Bow & Truss—having failed to run a successful business and having failed to fraudulently induce ML Foods to bail it out—now seeks to blame everyone but itself for its own mismanagement,” the lawsuit stated.
Last month, Tadros filed a $26 million lawsuit against Lemonis, the star of CNBC’s The Profit. Tadros accused Lemonis of making public statements to devalue Bow Truss so he could buy the company at a reduced price. He also claimed Lemonis wanted to weaken Bow Truss as he prepared to bring in a California-based coffee chain to Chicago.
Tadros is no stranger to lawsuits, as he’s embroiled in a case against Jared Leonard over the rights to the Budlong name. Bow Truss has been bleeding money for months, as Tadros has closed all but a handful of his more-profitable locations downtown. Before closing, he allegedly stopped paying his employees and covering their health care. That led to a walkout, and those ex-employees are gearing up for a class-action lawsuit against Tadros.
The lawsuit maintains that the money Lemonis loaned was supposed to be spent on facility improvements and payments made to landlords. Instead, Tadros allegedly paid off his own personal debts instead of the company’s, according to the lawsuit. Lemonis also claimed that Tadros falsely described assets that belonged to Bow Truss to make the company look more attractive to potential buyers. Instead, those assets belonged to his web design firm, Doejo.
The broken deal with Lemonis, a $3.25 million agreement to buy Bow Truss, was to help save the company. Without the money, Bow Truss is left rudderless and its future is very much in question. Lemonis’ legal team reiterates those arguments in their lawsuit. It seeks to recoup the $97,394 Lemonis loaned Bow Truss, as well as more than $40,000 in damages. That would eat away at the $162,000 break-up fee that the letter of intent mandates Lemonis to pay now that the purchase has deteriorated. The lawsuit seeks to dissolve the LOI.
Crain’s first reported Lemonis’ lawsuit, and in its report, they detail more lawsuits filed against Tadros.