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(Reuters) – Celebrity chef Chloe Coscarelli has settled a lawsuit against several investors in vegan fast-casual chain By Chloe, who allegedly misused her name, after she was evicted from the company by co-owner ESquared Hospitality, as if from a File filed Tuesday in federal court in Manhattan.
Coscarelli accused units of Bain Capital, Kitchen Fund and other investment firms of enabling ESquared’s trademark infringement by contributing more than $30 million to the company that “milked” its name without permission.
Both ESquared and the investors have said the chain has the right to use the “By Chloe” name.
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Tuesday’s filing asked the court to dismiss the case. Coscarelli’s attorney, Ron Schutz, of Robins Kaplan, said Wednesday the confidential settlement resolved all of the parties’ issues.
The investors and their attorneys did not immediately respond to requests for comment.
Coscarelli rose to fame as a vegan chef after winning Food Network’s Cupcake Wars and writing a best-selling cookbook. Her company, Chef Chloe, entered into a joint venture with ESquared to open the “By Chloe” restaurants.
Coscarelli accused ESquared of planning to buy Chef Chloe’s stake in the company for “zero dollars” and soon after raising more than $30 million in funding from the investors to expand the franchise.
An arbitrator restored Coscarelli’s 50 percent interest in 2020 and awarded her more than $2.2 million in attorneys’ fees and costs.
The investors “exploited Chloe’s name to maximize their own financial interests while also denying Chloe an opportunity to benefit from the company she founded that bore her name,” the lawsuit against her reads.
Chloe’s parent company filed for bankruptcy in late 2020, and a group that included some of the investors bought the chain’s assets out of bankruptcy last year. The assets did not include the “By Chloe” brand, and the group renamed the chain Beatnic.
The investors previously told the court the lawsuit was a “misguided attempt” to “belatedly and unfoundedly drag a group of minority investors into pre-existing disputes with their original business partner.”
Coscarelli settled with Collab+Consumer Fund I LP and Lion/BC LLC in addition to Bain Double Impact Fund LP and Kitchen Fund LP.
The case is Coscarelli v. Bain Double Impact Fund LP, U.S. District Court for the Southern District of New York, No. 1:21-cv-04159.
For Coscarelli: Ron Schutz and Patrick Arenz from Robin’s Kaplan
For Bain Capital: Robert Jones of Ropes & Grey
For Kitchen Fund: Eli Richlin of Wilson Sonsini Goodrich & Rosati
For Collab+Consumer: Richard Scherer from Lippes Mathias Wexler Friedman
For Lion/BC: Jacklyn Siegel of Davis+Gilbert
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