14-Dec-14 – Some of the driving forces of Chicago’s culinary scene are embroiled in a legal fracas over the fate of their joint venture, The Purple Pig, after one of the founders filed a lawsuit last month. The suit accuses his partners of embezzling revenues, manipulating records, and cutting him out of management at the popular River North restaurant.
Among other demands, Harris has asked the court to award him $1.5 million in damages – including $1 million in punitive damages, order a full audit and accounting of The Purple Pig’s books and records, and remove Bannos and son from ownership and management of the restaurant.
The suit brings to a full boil a years-long simmering dispute among the partners, who have received acclaim for their culinary skills and successful eateries, written cookbooks, and appeared on television programs.
Harris and Bannos, Sr., have been Purple Pig partners since 2008. Located at the corner of North Michigan Avenue and East Illinois Street, the Magnificent Mile establishment specializes in Mediterranean cuisine centered on “cheese, swine, and wine.”
Eventually, they added Mantuano to the venture, further bolstering the culinary credibility of the new restaurant, which brought together the chefs and owners of Chicago dining institutions Mia Francesca, Heaven on Seven, and Spiaggia.
The restaurant opened in 2009 under an ownership split awarding 40 percent each to Harris and Bannos, Sr., and 20 percent to Mantuano.
Bannos son gets partnership, other partners get less
The partners soon added Bannos, Jr., to the restaurant staff as chef with a five percent stake. This was despite Harris’s alleged misgivings over the Bannos son’s perceived lack of experience in restaurant management. This reduced the stake of the elder Bannos by two percent and stakes of Harris and Mantuano by one percent each.
A year later, allegedly without Harris“s approval, Bannos, Sr., added Veselsky to the partnership by awarding him a five percent stake that reduced Harris’s cut to 32 percent.
In 2013, the partnership was adjusted again without consulting Harris, giving Bannos, Jr., an additional three percent stake, again pulled from among the three primary partners, according to the suit.
The situation did not heat up until spring 2014, when Harris said he suspected misdealing at the restaurant and tried to investigate.
Harris claims his investigations have led him to believe the Bannos father and son have embezzled Purple Pig operating revenues and used business credit cards for their own personal use such as home repairs, personal vehicle expenses, personal health insurance, personal computers, an engagement party for a daughter, and “abusive spending” at an awards ceremony in New York.
In his lawsuit, Harris also alleges a kickback scheme in which the Bannos father and son attempted to conceal revenue from taxation by paying “bonuses” to Payne and making fake purchases from Prairie Bread Kitchen.
Harris further contends his partners manipulated employee time records, manually reducing hours worked to avoid paying overtime, potentially exposing the restaurant to regulatory action and lawsuits from employees.
Since early 2014, when he claims he began voicing concerns over alleged misdeeds, Harris says the other managing partners have moved to freeze him out of The Purple Pig’s books and management, preventing him from learning whether his allegations are correct, and if so, the full extent of his partners’ actions.
A judge has denied a request by Harris for an injunction and temporary restraining order. A status hearing is scheduled for December 18.