Multi-Million Dollar Lawsuit Filed By Original Brooklyn Water Bagel Co. Restaurant Investors Alleging Fraud And Breach Of Fiduciary Duty
PALM BEACH COUNTY, Fla., Sept. 27, 2017 /PRNewswire/ -- Brooklyn Water Enterprises, Inc. ("BWE"), the founding company of The Original Brooklyn Water Bagel Co. fast casual restaurant concept, has filed a multi-million dollar civil action against several key franchise owner entities and company board members, including John Preston, the founder and President of Canadian based North American Development Group which owns approximately 23 million square feet of shopping centers in the U.S. and Canada. The Plaintiff is represented by prominent Miami-based trial lawyer, Robert Zarco, of Zarco Einhorn Salkowski & Brito, P.A.
Among twelve direct and derivative causes of action, the Complaint alleges: (i) several violations of the Florida Revised Limited Liability Act; (ii) breach of fiduciary duty by the named company officers and directors; (iii) civil conspiracy; (iv) violation of the Florida Deceptive and Unfair Trade Practice Act; (v) fraud in the inducement; and (vi) negligent misrepresentation and omission. The Complaint also asks the Court for the judicial dissolution of Brooklyn Water Enterprises, LLC (the "Company"), and a rescission of the Company's Operating Agreement. The Complaint sets forth multiple instances of alleged deception and self-serving mismanagement by the Defendants to further their own economic interests at the expense of the Company and BWE shareholders. The civil action, which also requests a jury trial and the appointment of a custodian pendente lite for the Company while the litigation proceeds, was filed in the Circuit Court of the Fifteenth Judicial Circuit in and for Palm Beach County, Florida.
"In my many years of practicing commercial and franchise litigation, this case stands out as among the most outrageous self-serving acts I have ever seen by a company's board of directors," stated Robert Zarco, the lead attorney in the lawsuit. "The Plaintiff has alleged that the Defendants in this case used their substantial business assets and power to coerce and induce a group of small original investors in The Original Brooklyn Water Bagel Co. concept to agree to a merger that was financially detrimental to BWE and its shareholders. The evidence will reflect that these shareholders worked years to develop BWE and invested their life savings into the concept only to then have the Defendants, under the direction and leadership of Preston, take over BWE through the alleged illegal acts and the breach of their fiduciary duties. The Complaint alleges that some of these billionaire businessmen and their powerful and sophisticated advisors basically engaged in what our investigation revealed to be illegal behavior toward their business partners. We are looking forward to the judge and jury providing justice to my client in this matter and having all the Defendants pay the appropriate compensation for their misconduct."
According to the Complaint, BWE's Founder, Steven M. Fassberg, was fraudulently induced and coerced by Preston and the other named Defendants into a merger transaction while they allegedly orchestrated a series of allegedly illegal and highly unethical business maneuvers to deliberately and methodically take over majority control of BWE. Once the Defendants schemed to take over control of BWE and its Board of Directors, they mismanaged the day-to-day operations of the Company, including forcing corporate-owned and franchised stores to sign leases containing unfavorable terms in shopping centers owned by Preston's shopping center development company, North American Development Group.
Among the allegations set forth in the Complaint is a shocking accusation that Preston and the other Defendants knowingly used the family savings and assets of several 9/11 first responders from the New York City Fire Department, who had invested in BWE only to then turn around and dilute their interests in BWE.
"In my wildest dreams, I never thought I would ever find myself fighting for the company which I founded and having to protect the early shareholders on whose back the Brooklyn Water Bagel concept was built. Prior to Preston's involvement, BWE had virtually zero debt and approximately 12 million shares outstanding. It now finds itself with many more millions of shares outstanding, no franchise growth whatsoever, and minority shareholders' interests having been rendered valueless," says Fassberg.
The Original Brooklyn Water Bagel Co. was founded in 2007 by Steven M. Fassberg and attracted CNN legendary talk show host Larry King as an early investor and spokesperson from 2010- 2013. The concept features a proprietary water treatment process which creates artisan bagels, baked goods, and CUBSTA iced coffee with "real" iced coffee cubes in a fast casual, authentic Brooklyn-style setting. The Company has been featured on the cover story of Franchise Times, chosen by Barbra Streisand to cater the wrap party of her last movie, and was poised to be the fastest new bakery café concept in the country. The Company has 24 locations and is based out of Delray Beach, Florida.
MEDIA CONTACT
Robert Zarco
Tel: 305-374-5418
[email protected]
SOURCE The Original Brooklyn Water Bagel Co.
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