Monday, May 4, 2015

The Profit - A. Stein Meat Products Update - Settlement Reached In Lawsuit

Photo - CNBC
Marcus Lemonis and A. Stein Meat Products, which was featured on season 2 of The Profit, reached a settlement on April 29th, 2015 in their ongoing lawsuit.  The settlement terms were kept confidential, so it isn't clear what was agreed to by both parties, but here is a link to the court document.

For a little background on what happened before, during, and after the episode aired, here is a little timeline with some information:

  • The episode aired on March 4, 2014 and on the show Marcus offered about $200,000 ($190,000) for the trademarked brand Brooklyn Burger.
  • On March 5, 2014, Marcus posted the following message on his Facebook page:
  • "Since there are great opinions being offered up that represent both sides I thought I would clear the air.

    The offer that was made for one million is based on representations made by the two owners. They provided me data and told me what balances were. The whole they represented was around 500k. Additionally, the accounting system used here was antiquated.

    Let's be clear about this. At no point did I accuse either of them of lying. They simply told me one number and it was off by two million. All parties involved know that the check doesn't get cashed until I sign off on the financials and sign paperwork.
    Upon learning of the disastrous discrepancy I offered to still stay and help but told them it wasn't a good investment for me.
    I then was asked for money after I pulled out of the deal to fund payroll and other bills. I clearly told them that I can't just give them money. We agreed that I would buy brooklyn burger which only generated 1 million of the 50 million of sales they had. I wired the money the next day on a handshake without paperwork because they told me their word was their bond. They were able to make payroll and cover bounced checks. That was a month ago. We still have yet to finish the transfer. They have been unavailable by phone and have been busy. As you can see from the article that ran Monday, there was no mention of the delay in following thru. I trust that they will comply with our agreement. A number of negative comments on here are from family of the owners. I sympathize with the situation and as I have told them would meet in person with them including the owners.

    I would respectfully request that we don't attack their company or the owners. Business is business and it should never become personal. While I'm frustrated and disappointed in how things are being handled I have confidence that people ultimately do the right thing."
  • In May 2014, Marcus Lemonis filed a lawsuit saying he paid them $190,000 for Brooklyn Burger and never received anything.  The A. Stein owners claim the money was a loan to help out with their working capital needs. A. Stein meats was also in negotiations to sell their business to King Solomon and were going to include Brooklyn Burger in the sale.  There were 5 counts against A. Stein Meat Products and King Solomon. (All documents relating to the case)
  • According a court document (page 4), in October 2014, A. Stein defaulted on all of its debt and their assets including Brooklyn Burger were foreclosed upon by First Capital. First Capital sold the Brooklyn Burger trademarks to Hercules Food Corporation.
  • In March of 2015, the court ruled that a filmed verbal agreement does not equal a written contract and counts I through III and count V of the lawsuit were dismissed. Count IV remained open. (Page 12)
  • April 29th, 2015 - A settlement is reached on the remaining count (IV) of the original lawsuit, but the terms of the agreement are not known.

It appears that Marcus wanted the Brooklyn Burger brand more than he wanted his money returned as the documents say he was offered repayment by A. Stein.  If the terms of the agreement are made public, this post will be updated with that information.

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