Investor Sues Treadsack Restaurant Group for Breach of Contract
Treadsack principal Chris Cusack.
Photo by Chuck Cook
An investor in the troubled Treadsack group of Heights restaurants has sued the owners, accusing them of withholding payments and blocking access to the companies' financial records.
Houston attorney Richard Rothfelder alleges in the lawsuit, filed Monday in Harris County District Court, that he invested $60,000 in exchange for a percentage of net sales of Down House, D&T Drive Inn, Hunky Dory, Bernadine's and the now-shuttered Foreign Correspondents.
But after the parties signed an agreement in 2014, the defendants' "monthly payments...were sporadic," and "ceased entirely at least as early as May of 2015," according to the suit. Rothfelder alleges that he sent a demand letter in January 2017 seeking access to the company's books, but that principals Chris Cusack and Joseph Treadway have "failed to comply."
Rothfelder is seeking to recoup his initial investment, "plus pre- and post-judgment interest."
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In a June 2016 email obtained by the Houston Press, Rothfelder had sought better communication from the principals, expressing his concern over tardy checks and sales reports. According to his email, Cusack had told Rothfelder the restaurants were doing well, despite the fact that some were hemorrhaging money and had incurred heavy state and federal tax liens. Internal memos showed that employees had for years dealt with bounced paychecks.
The group's nationally lauded northern Thai restaurant, Foreign Correspondents, and its partner bar, Canard, closed in late 2016. In a lengthy statement, Cusack had blamed the closures on a bursting restaurant industry bubble and other natural market forces. In February, the company's popular Hunky Dory restaurant lost its executive chef, Richard Knight.
The Treadsack principals did not immediately respond to a request for comment. We'll keep you posted.
Update, 1:05 p.m. March 28: A reader pointed out Swamplot's reporting on the March 26 bankruptcy filing of Mothership Ventures — a.k.a. Hunky Dory and Bernadine's. Federal court records show that, to Cusack's and Treadway's credit, they sought (and were granted) an emergency motion to withdraw $40,435 to cover the next paychecks for the restaurants' roughly 81 employees.
Another hearing is scheduled for April 18. Again, we'll keep you posted.
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