Millionaire Tom Knox sues Table 31 for ending 50 percent discount

tom knox
Tom Knox has sued Table 31 in the Comcast Center for allegedly ending his 50 percent food and drinks discount. (Credit: Rikard Larma/Metro)

Philadelphia 2015 mayoral hopeful and millionaire Tom Knox has sued Table 31 restaurant in the Comcast Center for allegedly taking an axe to Knox’s 50 percent discount, as first reported by The Philly Post.

A breach of contract suit filed Thursday in Philadelphia’s Court of Common Pleas on behalf of Knox and his wife Linda Knox names 1701 JFK Restaurant, LLC, as well as owner Chris Scarduzio.

According to the complaint, Knox in 2008 became a partner in the “redefined steakhouse bistro,” agreeing to invest $250,000 for partnership shares “as well as in exchange for the guaranteed 50 percent discount on all food and beverage purchases.”

Knox claims the discount was “material” to his agreement.

Table 31 allegedly discontinued the half-price investor meals two years later “without explanation” and didn’t reinstate it despite Knox’s “repeated requests.”

Due to a lack of working capital, an amendment to the Table 31 partnership was proposed in January 2011 to include more investors and convert some advances into capital contributions, according to the suit.

The complaint states Knox refused to sign the amended partnership agreement without assurances the discount would again be honored

Partnership CFO Edward Lack allegedly wrote to the Knoxes the same month “to assure them that the 50 percent discount would be applied to all ‘food and bev’ charges going forward.”

But the 50 percent discount was allegedly again discontinued in 2012 “without explanation or basis.”

The Knoxes are seeking a court order dissolving their partnership with the restaurant, along with unspecified economic damages.

“The expense of operating the partnership including, inter alia, the cost of the guaranteed payments to Scarduzio and the ongoing rental expenses, are so great that the partnership cannot operate at a net gain in the future,” the complaint concludes.

It further states Table 31 is disqualified under the U.S. Security and Exchange Commission’s rules from making offerings to raise additional capital in the future.

Knox is asking for full access to the partnership’s books and financial records to determine “the extent of the mismanagement” as far as Table 31′s handling of its assets and compliance with SEC regulations.

Additional allegations

The suit also claims:

  • Table 31′s prospectus projected a $7.5 million design and construction budget, but Scarduzio made cash contributions totaling only $120, while as much as $4 million was slated to be raised from investors and an additional $3.5 million borrowed from financial institutions.

 

  • Table 31 operated at a net loss each year since it opened in 2008, even after receiving an advance from two investors in 2009 and 2010 totaling more than $1 million.

 

  • The loss came despite “purported efforts to reduce operating expenses and increase revenues,” including eliminating chef positions, reallocating restaurant staff and renegotiating the lease agreement.

 

  • The partnership continued to make annual guaranteed payments of $190,000 to Scarduzio and to provide him other benefits, such as a $600 monthly car allowance and family health insurance, even after investors were asked for more money in July 2010 and January 2011.

 

  • Scarduzio and Lack “fraudulently” assured Knox the partnership had complied with all U.S. Securities and Exchange Commission reporting requirements, but did not file the necessary paperwork.


News
Entertainment
Sports
Lifestyle
Money

The rules for dipping into your kid's college…

Find out when it is - and isn't - OK to use that locked vault college fund money to pay your bills.

Local

Times Square Spider-Man hauled off after punching cop:…

An amateur Spider-Man was anything but a hero on Sunday after authorities said he punched an officer to evade arrest in Times Square.

Local

Widow of Eric Garner says he was not…

The family of Eric Garner, who died while in NYPD custody, remembered him as being peaceful but constantly harassed by law enforcement.

News

Turkey: Voting begins in country's first direct presidential…

Some 53 million people are able to vote in the election, including 2.8 million citizens abroad. Until now, Turkish presidents were elected by parliament.

Books

Art imitates life (almost) in David Shapiro's new…

David Shapiro talks about his book, "You're Not Much Use To Anyone."

Gossip

Susan Sarandon likes doing drugs in the outdoors

Susan Sarandon got very, very candid about her feelings on drug use during an interview with the Daily Beast.

Gossip

Chris Martin dishes on 'conscious uncoupling' with Gwyneth…

"The thing we told everyone at the beginning of the year is true," says Chris Martin about Gwyneth Paltrow. "We are very close. We are not together."

Television

'Game of Thrones' livens up Comic Con with…

By Piya Sinha-RoySAN DIEGO (Reuters) - Laughter and death did battle on Friday at HBO's "Game of Thrones" panel at Comic Con, one of the…

Sports

Kevin Love becomes third NBA player to pull…

Kevin Love of the Minnesota Timberwolves became the third NBA player to withdraw from consideration for Team USA in next month's World Cup, USA Basketball.

U.S. Soccer

Orlando City takes shot at NYCFC over Frank…

Orlando City reminded the world how big a signing Brazilian star Kaka earlier this month with a photo of Kaka mobbed by fans juxtaposed against Lampard.

NBA

Jeremy Lin says 'Linsanity' is over as he…

Jeremy Lin lit up the NBA two years ago with his play for the Knicks but he has no desire to recreate "Linsanity" in his new career with the Lakers.

NFL

2014 NFL Fantasy Football Top 100 overall player…

2014 NFL Fantasy Football Top 100 overall player rankings

Food

Strawberry shortcake ice cream sandwiches

Make this ice cream sandwich all summer long.

Tech

Forget Wi-Fi: Li-Fi could be the future

Li-Fi technology – developed by Mexican company Sisoft – is wireless internet connectivity using specialized LED light.

Tech

Weather app Climendo might be the most accurate…

The wait for a truly accurate weather forecast could finally be over thanks to a nifty new app called Climendo.

Tech

Napkin Table puts focus off the phone and…

Michael Jan, a design student at Tunghai University in Taiwan, has invented a serviette-picnic blanket hybrid called the Napkin Table.