Case of the Week: Coffee Roaster Sues Marcus Lemonis After Business Purchase Fails

Bow & Truss Coffee Roasters, founded by Phil Tadros, has filed a complaint against Marcus Lemonis, star of CNBC’s The Profit, alleging fraud, tortious interference, and other allegations. The complaint alleges that Lemonis’s actions when attempting to purchase a majority stake in the coffee chain damaged the business, and the Lemonis committed fraud in an attempt to buy the business at a deflated price.

The complaint alleges that Lemonis signed a letter of intent to purchase 90 percent of Bow & Truss and provide a cash infusion into the business. Lemonis stated on Twitter that he had purchased the business and was now CEO. Lemonis also allegedly contacted Bow & Truss’s employees and creditors and informed them that he had purchased the business.

Tadros alleged that this statement misled customers and employees, as well as creditors. This misrepresentation allegedly damaged Bow & Truss, as did Lemonis’s statements to the press and on social media that disparaged Tadros.

The complaint further states that Bow & Truss used funds to pay creditors instead of payroll and health insurance because of Lemonis’s assurances that he would be advancing more funds before the business purchase was completed. Two hours before he had agreed to send the funds, Lemonis allegedly demanded that the purchase price of the business be significantly lowered. Tadros refused to comply, and Lemonis did not provide the funds. Tadros was unable to make payroll, and Bow & Truss employees walked out. Bow & Truss had to close most of its stores as a result.

Tadros alleges that Lemonis never intended to purchase Bow & Truss under the terms stated in the letter of intent. Lemonis was only interested in undermining the business in order to purchase it at a deflated price, or to eliminate the business as a competitor in the coffee business.

The complaint alleges damages of $6 million due to loss of reputation, loss of value to the store, and lost sales. It further alleges that Lemonis acted maliciously and willfully to harm Tadros, and that punitive damages of $20 million should be awarded.

Lemonis has responded with a countersuit, alleging that Tadros attempted to fraudulently induce Lemonis to buy Bow & Truss by committing fraud during the due diligence process.

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