Restaurant Law Blog

Monday, April 14, 2014

Celebrity Restaurant Lawsuit Illustrates the Complexities of Partnership Agreements

Celebrity Chef Gordon Ramsay Faces a Lawsuit by a Longtime Partner

Opening a bar or restaurant, or any business for that matter, in New York City has the potential to be expensive and risky, which can sometimes act as a deterrent for individuals who want to start a company of this kind on their own. Instead, partners and investors may be brought in to pool resources and talent. Restaurant partnership agreements vary greatly depending on each individual business, and disputes, misunderstandings and even potential cases of fraud can arise over such contracts. A recently filed lawsuit by an investor against celebrity chef Gordon Ramsay serves as a case in point.

Several years ago, Ramsay opened a Los Angeles restaurant called The Fat Cow with financial backing by Rowen Seibel, who had already worked with Ramsay on the opening of several other restaurants, including Gordon Ramsay Steak, Gordon Ramsay Pub & Grill and BurGR, all in Nevada. Seibel likely had little cause to anticipate a conflict, but quickly realized he wanted to pursue legal action.

According to the 34-page complaint, Ramsay chose the name The Fat Cow because he knew that the name was already in use by a Florida restaurant. Also according to the complaint, the ensuing trademark dispute quickly derailed the project, allowing Ramsay to complete his plan of closing The Fat Cow and creating a company that opened another restaurant in the same lease space.

Seibel seems to attribute the breach and falling out to Ramsay’s famously volatile and authoritarian personality. "Gordon Ramsay attempted to run the business and make decisions on behalf of [the parties involved] similar to his Hell's Kitchen on television - as a dictatorship," Seibel claimed. This alleged dictatorial behavior extended to a “dramatic money grab” that involved the shuttering of The Fat Cow and opening of restaurant without Seibel.

Seibel is seeking $10 million in damages.

As this case illustrates, partnerships between even long-established partners such as Seibel and Ramsay can be vulnerable to costly lawsuits. For this reason, it makes sense to work with a law firm dedicated to protecting the rights of restaurant, nightclub and bar owners. James DiPasquale of New York City's DiPasquale Law Group routinely represents restaurateurs in all aspects of their business and can provide qualified legal help. To contact our firm, call 646-383-4607.

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