Root & Bone Lawsuit

FILED: NEW YORK COUNTY CLERK 08/08/2017 11:25 AM INDEX NO.
655244/2017
NYSCEF DOC. NO. 1 RECEIVED NYSCEF: 08/08/2017
SUPREME COURT OF THE STATE OF NEW YORK

COUNTY OF NEW YORK
RICHARD FREEDMAN, )
individually and derivatively on ) Index No.:
behalf of ROOT & BONE LLC, and )
AVENUE BEE DEVELOPMENT )
CORP., )
Plaintiffs, ) SUMMONS
v. )
)
JEFFREY MCINNIS and JANINE )
BOOTH, )
)
Defendants. )
______________________________ )
TO THE ABOVE NAMED DEFENDANTS:
You are hereby summoned to answer the complaint in this action and to serve a copy of
your answer or, if the complaint is not served with this summons, to serve a notice of
appearance, on the plaintiffs attorneys within twenty (20) days after the service of this
summons, exclusive of the day of service (or within thirty (30) days after the service is complete
if this summons is not personally delivered to you within the State of New York) and in case of
your failure to appear or answer, judgment will be taken against you by default for the relief
demanded in the complaint.
Dated: August 8, 2017 TAYLOR COLICCHIO LLP

ATTORNEYS FOR PLAINTIFFS
By:__/s/ Philip M. Colicchio_______________

Philip M. Colicchio
425 Fifth Avenue, 5t Floor
New York, New York 10016
(212) 661-1700
[email protected]
Defendants:
Jeffrey McInnis
200 East 3rd Street
Apt. 2E
Janine Booth
200 East 3rd Street
Apt. 2E
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FILED: NEW YORK COUNTY CLERK 08/08/2017 11:25 AM INDEX NO. 655244/2017
SUPREME COURT OF THE STATE OF NEW YORK

COUNTY OF NEW YORK
RICHARD FREEDMAN, )
individually and derivatively on ) Index No.:
behalf of ROOT & BONE LLC, and )
AVENUE BEE DEVELOPMENT )
CORP., ) COMPLAINT
Plaintiffs, ) (Jury Trial Demanded)
v. )
)
JEFFREY MCINNIS and JANINE )
BOOTH, )
)
Defendants. )
______________________________ )
NOW COMES Richard Freedman, individually and derivatively on behalf of
Root & Bone LLC (hereinafter referred to respectively as Mr. Freedman and the
Company), and Avenue Bee Development Corp. (hereinafter ABD Corp) by and
through undersigned counsel, and complain against Defendants Jeffrey McInnis and
Janine Booth as follows:
CASE OVERVIEW
1) In 2013, Plaintiff Richard Freedman and Defendants Jeffrey McInnis and
Janine Booth formed Root & Bone LLC to open and operate a restaurant at the property
located at 300 East 3rd Street, New York, New York 10009 (the Property), which is
owned by Avenue Bee Development, LLC.
2) Defendant McInnis is the sole manager of the Company, and was brought
in by Mr. Freedman due to his strong reputation and track record as a chef and restaurant
operator.
3) Instead of abiding by the fiduciary duties to which he is obligated under
New York law, McInnis, aided and abetted by Booth, has engaged in willful misconduct
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and fraudulent behavior, including, but not limited to, converting Company funds and
assets for a myriad of his own personal uses and devoting both those Company funds and
assets and significant time towards other personal ventures, all to the extreme detriment
of the Company.
4) Mr. Freedman has demanded that McInnis step down as manager and
account for his misappropriation and misuse of Company funds and assets, but McInnis
has failed and refused to take any action to remedy his wrongful conduct.
5) Therefore, Mr. Freedman, individually and on behalf of the Company,
now seeks to hold McInnis and his co-conspirator Booth responsible for the damages
they have caused to the Company.
THE PARTIES
6) Plaintiff Richard Freedman is a Member of the Company and holds one
hundred and fifty (150) membership units.
7) Plaintiff Avenue Bee Development Corp. is the owner of the Property,
located at 200 East 3rd Street, New York, New York 10009.
8) Defendant Jeffrey McInnis is a Member of the Company and holds one
hundred and fifty (150) membership units, and serves as the manager of the Company.
9) Defendant Janine Booth is a Member of the Company and holds one
hundred and fifty (150) membership units
JURISDICTION AND VENUE
10) This Court has jurisdiction pursuant to CPLR 301 and 302, and venue
pursuant to CPLR 503.
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FORMATION OF THE COMPANY
11) On September 27, 2013, Mr. Freedman, McInnis, Booth and the Company
entered into a Limited Liability Company Operating Agreement (the Operating
Agreement).
12) Mr. Freedman, McInnis and Booth each held one hundred and fifty (150)
member units in the Company.
13) Pursuant to Section 2.01, the Company was formed for the purpose of
carrying on any lawful purpose permitted to be carried on by limited liability companies
under applicable law, including opening and operating a restaurant on the Premises under
the name Root & Bone . . .
14) Pursuant to Section 7.01, McInnis was appointed manager of the
Company, and was responsible for the day-to-day operations of the Company and for
implementing the decisions of the Members . . .
15) Pursuant to Section 8.01(b), the manager may be liable to the Company
for actions taken or omitted that are not in good faith and with the belief that such action
or omission is in, or not opposed to, the best interest of the Company, or for actions
taken or omitted that constitute fraud, gross negligence or willful misconduct.
16) Pursuant to Section 8.02, the manager is not entitled to indemnity for any
act or omission taken on behalf of the Company if the manager does not act in good
faith and in a manner believed by such [manager] to be in, or not opposed to, the best
interest of the Company, or if the managers conduct constitutes fraud, gross
negligence or willful misconduct . . .
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17) Pursuant to Section 11.01, any Member shall be entitled for any purpose
to a copy of . . . other records or books specified in applicable law.
18) Pursuant to Section 12.01, no Member shall, directly or indirectly,
disclose or use . . . at any time, including, without limitation, use for personal,
commercial or proprietary advantage or profit, either during his association or
employment with the Company or thereafter, any Confidential Information of which such
Member is or becomes aware.
19) Pursuant to Sections 13.01 and 13.02, McInnis was also employed by the
Company as the restaurants executive chef, with a maximum annual salary of
$75,000.00.
20) The Root & Bone restaurant at the Property opened on July 1, 2014.
21) McInnis initially devoted adequate time and effort to his duties as
executive chef of the Root & Bone restaurant.
22) Sometime after the opening of the restaurant, McInnis provided a
proposed Management Agreement to Mr. Freedman.
23) The Management Agreement, which named a business entity owned by
McInnis as manager of the restaurant, was drafted solely by McInnis, and contained
terms strongly favorable to McInnis management entity.
24) Mr. Freedman never approved of nor executed the proposed Management
Agreement.
25) Subsequent to the formation of the Company and the opening of the
restaurant, McInnis and Booth, as individuals, entered into a Residential Apartment Lease
(the Lease) with ABD Corp for Apartment 2 at the Property.
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26) ABD Corp. is owned by Mr. Freedman.
27) The Lease provided that both McInnis and Booth had exclusive use of
Apartment 2 so long as they owned and operated the Company, with the lease
terminating if they ceased to own or operate the Company.
28) The Lease also provided that McInnis and Booth intended to spend
$100,000.00 to renovate Apartment 2.
29) Pursuant to Section 10 of the Lease, McInnis and Booth are in breach of a
substantial obligation of the Lease if they assign or sublet the apartment in whole or in
part without written consent from ABD Corp.
30) Pursuant to Sections 17 and 18 of the Lease, if McInnis and Booth are in
breach of the Lease, ABD Corp. may terminate their tenancy and the Lease upon ten (10)
days notice, with McInnis and Booth liable for the use and occupancy until the
expiration of the Lease or until the apartment is re-rented (in which case McInnis and
Booth shall be liable for the difference in rent of the subsequent tenant, as well as all
expenses incurred in re-renting the apartment).
31) Nowhere in the Lease is there a provision that the Company will pay any
amounts for rent or improvements on behalf of McInnis and Booth.
32) Throughout the time that Root & Bone has been open and operating,
McInnis and Booth have assured Mr. Freedman that the restaurant is doing fine, but
that it was not making much, if any, profit.
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MCINNIS AND BOOTHS WILLFUL MISCONDUCT AND FRAUDULENT

ACTIVITY
33) Unbeknownst to Mr. Freedman, McInnis and Booth have intentionally,
repeatedly and continuously converted funds from the Company to their own purposes, to
the detriment of both the Company and Mr. Freedman.
34) McInnis and Booth intentionally converted distribution proceeds that
should have been paid to the Members to pay personal loan payments to third parties.
35) Without any authorization or notice, McInnis and Booth intentionally
converted almost $85,000.00 from the Company to pay rent for under the Lease, which
McInnis and Booth entered into personally.
converted almost $136,000.00 from the Company to pay for renovations to Apartment 2
at the Property, which they were leasing personally.
converted funds from the Company to engage and pay a public relations firm to provide
services for outside projects owned by McInnis that are unrelated to the Company.
38) Overall, McInnis and Booth have failed to account for over $286,500.00 is
cash distributions from the Company since its inception.
39) McInnis and Booths conversion of funds, which was not only not
authorized, but completely unknown to Mr. Freedman, constitutes willful misconduct and
fraud upon the Company and Mr. Freedman.
40) Recently, after Mr. Freedman raised a number of issues with the above,
McInnis and Booth provided a series of distributions from the Company to Mr.
Freedman, one of which McInnis stated was from 2015.
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41) Mr. Freedman cannot discern how such distributions were calculated, nor
why they were provided just recently.
42) Mr. Freedman has often requested access to the books and records of the
Company, only to be rebuffed or provided with incomplete and inaccurate
documentation.
43) For example, when Mr. Freedman has requested profit and loss
statements, the documents produced by McInnis and Booth have contained only
information concerning the income of the Company, not any of its expenses.
44) When he pressed them for information about the expenses of the
Company, McInnis and Booth provided only excuses, and never any of the requested
documentation.
45) With such misrepresentations and omissions, Mr. Freedman, despite being
an equal member, has been unable to get any idea of how the Company functions
financially or practically.
46) In addition to the above conversions of funds, Booth has openly shirked
his duties and responsibilities as a member and manager of the Company, and converted
intellectual property and Confidential Information belonging to the Company for his own
use and profit.
47) McInnis has been quoted in several publications stating that he has taken
the whole Root & Bone menu - Confidential Information of the Company - to open a
pop up restaurant in Puerto Rico, which he operates for his own personal gain.
48) McInnis has misappropriated the Root & Bone name for use in his
other, unrelated ventures.
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49) McInnis has also been actively promoting the opening of another
restaurant venture in Miami with other investors.
50) McInnis continues to take a salary from the Company (which Mr.
Freedman has learned is around $85,000.00, despite there never being any agreement to
amend the Operating Agreement to allow for a salary over $75,000.00) purportedly for
still acting as executive chef, despite the fact that he spends little time at the Root & Bone
restaurant, instead choosing to promote himself and his other ventures when he is bound
to commit his efforts and time to the operations of the Company.
51) In fact, McInnis is often absent from the restaurant for months at a time,
and has hired multiple new chefs and managers at high salaries to oversee daily
operations of the Company.
52) McInnis use of Company assets and Confidential Information and
devotion of time and effort to other ventures to the near complete dereliction of his duties
and role at the Company is a violation of the terms of the Operating Agreement, and
constitute willful misconduct and fraudulent action.
53) Further, the above conversion of funds for personal use, failure to devote
the required time and effort to his role as manager and executive chef, and promotion of
outside, unrelated venture at the expense of the Company also constitute willful
misconduct and fraudulent actions on the part of McInnis and Booth that is in violation of
their fiduciary duties to the Company.
54) In addition, McInnis and Booth have allowed a subtenant to reside at
Apartment 2 without the consent of ABD Corp., in direct violation of the Lease.
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55) When Mr. Freedman questioned McInnis and Booth about the subtenant,
McInnis and Booth stated that the apartment was being used for storage, despite the clear
evidence of occupancy by another individual.
FIRST CAUSE OF ACTION

(Breach of Fiduciary Duty)
56) Plaintiffs repeat and re-allege the allegations set forth in all preceding
paragraphs of this Complaint, as if fully set forth herein.
57) Both McInnis and Booth, as members and manager of the Company, have
breach their fiduciary duties to the Company, including the duties of care, loyalty, and
good faith and fair dealing.
58) McInnis and Booth have intentionally converted funds for their own
person use, to pay for a myriad of services and items unrelated to the Company.
59) McInnis and Booth received no authorization from the Company to use
such funds in such ways, and actively concealed those uses from Mr. Freedman.
60) McInnis additionally breached his duties by failing to devote the required
time and effort to his roles of executive chef and manager of the Company, instead
promoting himself and his other unrelated ventures, all at the expenses of the Company
and Mr. Freedman.
61) McInnis and Booths conduct has been intentional and fraudulent.
WHEREFORE, the Plaintiff, Richard Freedman, individually and derivatively
on behalf of Root & Bone LLC, hereby demand judgment against the Defendant Jeffrey
McInnis and Janine Booth:
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A. Awarding the Plaintiffs compensatory damages;
B. Awarding the Plaintiffs punitive damages;
C. Awarding the Plaintiffs costs and attorneys fees; and,
D. Awarding the Plaintiffs such other and further relief as the Court deems just and
equitable under the circumstances.
SECOND CAUSE OF ACTION

(Conversion)
62) Plaintiffs repeat and reallege the allegations set forth in all preceding
63) McInnis and Booth have intentionally converted Company funds for their
own person use, to pay for a myriad of services and items they purchased personally,
which are unrelated to the Company.
64) McInnis and Booth received no authorization from the Company to use
such funds in such ways, and actively concealed those uses from Mr. Freedman.
65) McInnis and Booth had no right to access and use those Company funds
for personal reasons.
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THIRD CAUSE OF ACTION

(Fraud)
67) McInnis and Booth have both made material misrepresentations and
omissions to Mr. Freedman concerning the financial status and operations of the
Company.
68) McInnis and Booth have intentionally made these misrepresentations and
omissions in order to use Company funds and assets to enrich themselves and pay
personal debts, at the expense of Mr. Freedman and the Company.
69) McInnis and Booth have also provided incomplete and inaccurate
documentations concerning the operations of the Company in furtherance of these
fraudulent aims.
70) Mr. Freedman reasonably relied on the representations of McInnis and
Booth, equal members in the Company and individuals whom he agreed to grant
management powers in the Company based upon their track record as chefs and operators
of restaurants.
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71) McInnis and Booth took advantage of this reliance for their own personal
gain, and have caused serious damages to Mr. Freedman and the Company.
FOURTH CAUSE OF ACTION

(Unjust Enrichment)
73) McInnis and Booth have intentionally converted Company funds for their
own person use, to pay for a myriad of services and items they purchased personally,
which are unrelated to the Company.
74) The use of these funds has personally enriched McInnis and Booth.
75) McInnis and Booth were enriched at the expense of the Company and Mr.
Freedman.
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76) It is inequitable for McInnis and Booth to receive such enrichment at the
expense of the Company and Mr. Freedman.
E. Awarding the Plaintiffs compensatory damages;
F. Awarding the Plaintiffs punitive damages;
G. Awarding the Plaintiffs costs and attorneys fees; and,
H. Awarding the Plaintiffs such other and further relief as the Court deems just and
FIFTH CAUSE OF ACTION

(CIVIL CONSPIRACY)
78) McInnis and Booth have committed the torts of breach of fiduciary duty
and conversion.
79) McInnis and Booth carried out these torts under a secret agreement that
was concealed from the Company and Mr. Freedman.
80) McInnis and Booth both took multiple overt acts to further their
conspiracy to defraud the Company and Mr. Freedman.
81) As a result, the Company and Mr. Freedman have suffered damages.
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SIXTH CAUSE OF ACTION

(ACCESS TO RECORDS AND ACCOUNTING)
83) Pursuant to New York Limited Liability Company Law 1102, Mr.
Freedman hereby demands access to all books and records of the Company which are in
possession of the manager, McInnis, including, but not limited to bank statements, profit
and loss statements, ledgers, invoices and receipts.
84) Mr. Freedman also demands an accounting of the use of all Company
funds by McInnis and Booth.
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A. Awarding access to all Company books and records;
B. Compelling McInnis and Booth to account for the use of all Company funds;
SEVENTH CAUSE OF ACTION

(BREACH OF LEASE)
86) McInnis and Booth have allowed a subtenant to occupy Apartment 2.
87) ABD Corp. has not consented in writing to any sublease of Apartment 2.
88) McInnis and Booth are in breach of the Lease.
WHEREFORE, the Plaintiff, Avenue Bee Development Corp., hereby demands
judgment against the Defendant Jeffrey McInnis and Janine Booth:
A. Declaring that the Lease, by its terms, is terminated;
B. Declaring that the Defendants are liable for the remaining rent due under the
Lease;
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Respectfully submitted this the 8th day of August, 2017
TAYLOR COLICCHIO LLP

ATTORNEYS FOR PLAINTIFFS
By:__/s/ Philip M. Colicchio_______________

Philip M. Colicchio
425 Fifth Avenue, 5t Floor
(212) 661-1700
[email protected]
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FILED: NEW YORK COUNTY CLERK 08/08/2017 11:25 AM INDEX NO.

SUPREME COURT OF THE STATE OF NEW YORK

TO THE ABOVE NAMED DEFENDANTS:

Dated: August 8, 2017 TAYLOR COLICCHIO LLP

By:__/s/ Philip M. Colicchio_______________

SUPREME COURT OF THE STATE OF NEW YORK

NOW COMES Richard Freedman, individually and derivatively on behalf of

Janine Booth as follows:

1) In 2013, Plaintiff Richard Freedman and Defendants Jeffrey McInnis and

owned by Avenue Bee Development, LLC.

3) Instead of abiding by the fiduciary duties to which he is obligated under

5) Therefore, Mr. Freedman, individually and on behalf of the Company,

they have caused to the Company.

6) Plaintiff Richard Freedman is a Member of the Company and holds one

hundred and fifty (150) membership units.

7) Plaintiff Avenue Bee Development Corp. is the owner of the Property,

8) Defendant Jeffrey McInnis is a Member of the Company and holds one

9) Defendant Janine Booth is a Member of the Company and holds one

hundred and fifty (150) membership units

JURISDICTION AND VENUE

pursuant to CPLR 503.

FORMATION OF THE COMPANY

entered into a Limited Liability Company Operating Agreement (the Operating

member units in the Company.

carrying on any lawful purpose permitted to be carried on by limited liability companies

the name Root & Bone . . .

14) Pursuant to Section 7.01, McInnis was appointed manager of the

implementing the decisions of the Members . . .

taken or omitted that constitute fraud, gross negligence or willful misconduct.

interest of the Company, or if the managers conduct constitutes fraud, gross

negligence or willful misconduct . . .

to a copy of . . . other records or books specified in applicable law.

18) Pursuant to Section 12.01, no Member shall, directly or indirectly,

commercial or proprietary advantage or profit, either during his association or

Member is or becomes aware.

Company as the restaurants executive chef, with a maximum annual salary of

executive chef of the Root & Bone restaurant.

22) Sometime after the opening of the restaurant, McInnis provided a

proposed Management Agreement to Mr. Freedman.

23) The Management Agreement, which named a business entity owned by

terms strongly favorable to McInnis management entity.

(the Lease) with ABD Corp for Apartment 2 at the Property.

26) ABD Corp. is owned by Mr. Freedman.

terminating if they ceased to own or operate the Company.

$100,000.00 to renovate Apartment 2.

part without written consent from ABD Corp.

expenses incurred in re-renting the apartment).

amounts for rent or improvements on behalf of McInnis and Booth.

that it was not making much, if any, profit.

MCINNIS AND BOOTHS WILLFUL MISCONDUCT AND FRAUDULENT

33) Unbeknownst to Mr. Freedman, McInnis and Booth have intentionally,

the detriment of both the Company and Mr. Freedman.

34) McInnis and Booth intentionally converted distribution proceeds that

35) Without any authorization or notice, McInnis and Booth intentionally

McInnis and Booth entered into personally.

By:/s/ Philip M. Colicchio_____________