Sadis & Goldberg LLP Obtains Victory for Bareburger Co-Founder: A Cautionary Tale for Business Divorce

Sadis & Goldberg LLP announces a major litigation victory in winning summary judgment on liability against the co-founders of Bareburger, the popular better-burger restaurant chain. Stavroulakis v. Pelakanos, 2018 N.Y. Slip. Op. 50180(U) (N.Y. Sup. N.Y. Cnty. February 13, 2018). Sadis & Goldberg represented one of the original founders of Bareburger who alleged that he had been unlawfully and secretly cut out of the business by his co-founders. Shortly after Sadis & Goldberg's summary judgment victory the parties agreed to a settlement. In finding in favor of Sadis & Goldberg's client, Justice Shirley Werner Kornreich stressed that there were proper and improper-legal and illegal-ways to effectuate a business divorce: "while the Founders could have sought to effectuate a freeze-out merger to obtain a business divorce from plaintiff, they did not do so." Justice Kornreich similarly noted that "to the extent a majority believes a business would be better off without a problem shareholder, there is legal recourse available to them" but the Defendants in this case "did not avail themselves to these permissible options." As such, Justice Kornreich found that the Defendants were personally liable to Sadis & Goldberg's client.

Sadis & Goldberg achieved this victory by zealously prosecuting this action at every step, from the original complaint to discovery to summary judgment. Sadis & Goldberg moved for summary judgment on liability even before the close of discovery. And after being found personally liable on summary judgment and Sadis & Goldberg being ready for trial, the Defendants agreed to settle. Douglas Hirsch, the head of Sadis & Goldberg's Litigation practice, argued for Plaintiff on summary judgment. Jennifer Rossan and Ben Hutman conducted discovery and helped draft all of Plaintiff's motion papers.

If you have any questions about this case or Sadis & Goldberg's business divorce practice and commercial litigation practice, please contact Litigation Partners Doug Hirsch (212) 573-6670, Sam Lieberman (212) 573-8164, Jennifer Rossan (212) 573-8783 or Litigation Associate Ben Hutman (212) 573-6675.