Celebrity vegan chef settles ‘By Chloe’ IP dispute with investors

A staff member prepares food at By Chloe restaurant in London August 3, 2020. REUTERS / John Sibley

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  • Chloe Coscarelli said investors profited from misuse of her name
  • Investors said lawsuit was a misdirected effort to sweep them into a preexisting dispute
  • Is the latest development in chef’s long-running litigation saga

(Reuters) – Celebrity chef Chloe Coscarelli settled a lawsuit against several investors in the “By Chloe” vegan fast-casual chain that allegedly misused her name after she was cut out of the venture by co-owner ESquared Hospitality, according to a Tuesday filing in Manhattan federal court.

Coscarelli accused units of Bain Capital, Kitchen Fund and other investment companies of enabling ESquared’s trademark infringement by contributing more than $ 30 million to the venture that “milked” her name without permission.

ESquared and the investors have both said the chain had the legal right to use the “By Chloe” name.

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The Tuesday filing asked the court to dismiss the case. Coscarelli’s attorney Ron Schutz of Robins Kaplan said Wednesday that the confidential settlement resolves all of the parties’ issues.

The investors and their attorneys did not immediately respond to requests for comment.

Coscarelli gained fame as a vegan chef after winning Food Network’s Cupcake Wars and writing a best-selling cookbook. Her company Chef Chloe entered a joint venture with ESquared to open “By Chloe” restaurants.

Coscarelli accused ESquared of scheming to improperly buy Chef Chloe’s interest in the venture for “zero dollars” and winning more than $ 30 million in financing from investors soon after to expand the franchise.

An arbitrator reinstated Coscarelli’s 50% ownership stake in 2020, awarding her more than $ 2.2 million in attorneys’ fees and costs.

The investors “exploited Chloe’s name to maximize their own financial interest while also denying Chloe the opportunity to benefit from the company she created and that bore her name,” according to her lawsuit against them.

By Chloe’s parent company filed for bankruptcy in late 2020 and a group including some of the investors bought the chain’s assets out of bankruptcy last year. The assets did not include the “By Chloe” trademark, and the group rebranded the chain as Beatnic.

The investors previously told the court that the lawsuit was a “misdirected effort” to “belatedly and groundlessly sweep 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, US District Court for the Southern District of New York, no. 1: 21-cv-04159.

For Coscarelli: Ron Schutz and Patrick Arenz of Robins Kaplan

For Bain Capital: Robert Jones of Ropes & Gray

For Kitchen Fund: Eli Richlin of Wilson Sonsini Goodrich & Rosati

For Collab + Consumer: Richard Scherer of Lippes Mathias Wexler Friedman

For Lion / BC: Jacklyn Siegel of Davis + Gilbert

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Blake Brittain

Thomson Reuters

Blake Brittain reports on intellectual property law, including patents, trademarks, copyrights and trade secrets. Reach him at blake.brittain@thomsonreuters.com

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