An ongoing legal fight between two big-name New Orleans chefs boils down to who gets to use one of those names – Shaya.
The latest round in the brawl came Wednesday when the chef who was born with that name, Alon Shaya, filed a counter suit against chef John Besh and his company, which developed the hugely popular and acclaimed Shaya Restaurant.
In a new filing in federal court, Shaya is seeking damages for wrongful termination and asking the court to affirm his ownership stake in three restaurants developed by the Besh Restaurant Group. He also wants the court to block the Besh company from using the name Shaya.
In the counter claim, Shaya describes a souring relationship between him and his former partners in Besh Restaurant Group and his efforts to buy them out of his namesake restaurant.
It was a rift that deepened once allegations of sexual harassment against Besh were reported in a nola.com story in October, which he now argues has damaged his name and reputation, as the Besh group continues to use his name at Shaya Restaurant.
When he sought to buy the restaurant, Alon Shaya says he was given unrealistically high offers, a contention the Besh company denies.
Today, Shaya says he is no longer trying to purchase the Magazine Street eatery but is focused on securing the use of its name.
“I’m profoundly disappointed that we have come to this point,” Shaya said in a statement. “After more than a year of trying in good faith to buy Shaya Restaurant, I am now forced to fight in court for the rights to my own name. Shaya is more than a sign on a restaurant. It is my personal and culinary heritage and I will not give up my fight to reclaim it.”
The counter claim is part of a lawsuit filed in October by Shaya Restaurant LLC against Alon Shaya, seeking to protect its own use of the trademark Shaya. The move came after Alon Shaya filed a federal trademark request for the name Shaya and, through attorneys, sent Shaya Restaurant a cease-and-desist letter demanding that the restaurant change its name.
On Wednesday, Shannon White, who has been CEO of Besh Restaurant Group since John Besh stepped down in October, issued a defiant response to Shaya’s latest salvo over the name and promised further legal action.
“The owners of Shaya have made multiple generous offers to sell their restaurant to Alon for a price much lower than market value, all of which have been rejected,” White said in a statement.
“While it is unfortunate that Alon would attempt to leverage the nola.com story, rather than simply pay a fair price for the restaurant, we know that our employees and patrons realize that there is much more to this story than what Alon contends in his lawsuit. We are left with no choice except to present the facts and the rest of the story through the court filings, which will be forthcoming.”
In its response, the Besh Restaurant Group counters some essential points of Shaya’s suit. Significantly, the company denies he was ever a “vested owner” of Shaya Restaurant. Shaya claims he owns one-third of the Israeli eatery, as well as 30 percent of Pizza Domenica and 15 percent of Domenica.
A falling partnership
Shaya worked for Besh Restaurant Group for years, rising in the ranks to become executive chef and partner in the three restaurants. He and Shaya Restaurant won multiple James Beard Foundation awards and garnered wide-ranging media attention and critical acclaim.
He was fired from the company in September. A month later, an exposé by restaurant writer Brett Anderson documented accusations by numerous female employees of sexual misconduct by Besh and his business partner Octavio Mantilla.
Earlier this year Shaya formed a new culinary company called Pomegranate Hospitality, which has conducted events but does not yet operate a restaurant.
Wednesday’s filing is a point-by-point answer by Shaya to the suit seeking to block him from using his name. The Besh group had argued that the company’s resources and reputation and the skills of Besh and Mantilla guided the success of the restaurants in which Shaya was involved.
Shaya’s own filing, however, counters that “much of the success of the BRG restaurants comes from the individual restaurant’s executive chef, and not because of the input or guidance of the BRG.”
Shaya contends it was he, with the help of an outside design firm, who “developed the concept, recipes and décor for all three restaurants. Additionally, Alon Shaya did the hiring, all ordering of food and beverages, and an enormous amount of publicity. Further, it was Alon Shaya, and not Besh, Mantilla or BRG, that in 2015 won the James Beard Award for Best Chef: South, and led Shaya to win the 2016 James Beard Award for Best New Restaurant.”
“Alon Shaya is the guiding force behind the national recognition for Shaya,” the suit asserts. “The credit for the immediate success of Shaya is due to the leadership of Alon Shaya, his hard working team of employees, and his culinary expertise.”
Shaya also claims he was wrongfully terminated “in direct retaliation to talking to Brett Anderson of nola.com,” even though he claims the Besh Restaurant Group’s corporate counsel knew of and approved the meeting between Shaya and the reporter.
Elsewhere in the suit, Shaya claims he learned of the Besh Restaurant Group’s “toxic work environment from Brett Anderson.”
In a statement in response to the counter suit, the Besh group said Shaya was not fired for whistleblowing.
According to Shaya’s latest filing, the rift between Shaya and his partners at the Besh group goes deeper, beginning around 2015 when the chef "grew frustrated with Besh and Mantilla’s lack of involvement and failure to provide (him) with proper resources and support to manage Domenica, Pizza Domenica and Shaya Restaurant.”
Discussions to resolve the issues “went nowhere,” the filing asserts, and by the end of 2016 “it became evident that Alon Shaya, Besh and Mantilla needed to sever their business ties.”
Shaya claims that Mantilla told him he could buy out Besh and Mantilla’s shares in Shaya Restaurant “for 17-18 times EBITDA,” (or earnings before interest, taxes, depreciation and amortization, a standard business valuation measure). Shaya turned down these offers.
While individual business valuations vary widely, the local standard for restaurants is a much lower rate, closer to three to five times EBITDA, according to Gerard H. Schreiber, Jr., a Metairie-based certified public accountant.
“There are multiple factors that move that up and down, including the reputation of the people involved,” Schreiber said, noting the potential negative impact to the business from the sexual harassment allegations. “It’s not a cut-and-dried sale of a hot restaurant any longer.”
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