Buca sues Faegre & Benson over restaurant deal that went sour

  • Article by: DAVID PHELPS , Star Tribune
  • Updated: December 22, 2011 - 9:37 PM

Restaurant chain accuses firm of botching 2006 transaction

Logo for the Buca di Beppo restaurant chain

A once decade-long relationship between Buca Inc. and the law firm Faegre & Benson is now the subject of a messy malpractice lawsuit brought by the owner of the Buca di Beppo chain of restaurants.

Buca claims that Faegre and three of its attorneys botched the 2006 sale of its "struggling" Vinny T's restaurant chain by omitting "a standard indemnity clause" to protect Buca from any future liabilities on leases at various Vinny T's locations.

"Thus, at the time of closing of what was only a $6.8 million transaction, Buca unwittingly remained saddled with some $37 million in contingent liabilities as guarantor of several Vinny T's leases," the lawsuit states.

The law firm denies the allegations.

Buca's lawsuit said that Vinny T's potential liabilities became real liabilities in 2010 as the Minneapolis-based company began to get default notices and lawsuit papers from landlords of Vinny T's due to nonpayment of rent by then-owner C&T Restaurant Management.

Buca eventually purchased the assets of the remaining Vinny T's in June 2010 for $3 million. Buca is a subsidiary of Florida-based Planet Hollywood International.

Faegre, the lawsuit states, "failed to follow the instructions of their client to include indemnity language" in the original purchase agreement.

Response from Faegre

In its answer to the Buca suit, Faegre states that they "specifically deny that it is 'usual and customary' for sales and acquisitions of restaurant chains to include indemnity for claims and damages arising from the operation of restaurants" after the transaction closes.

Buca attorney William Skolnick said the restaurant chain is seeking damages of $9 million for the repurchase and remodeling of the Vinny T's restaurants it bought, as well as operating losses.

Buca also is seeking the return of more than $100,000 in legal fees it paid for the original sale of Vinny T's in 2006.

The lawsuit comes as the Faegre law firm approaches its Jan. 1 merger with the Indianapolis law firm of Baker & Daniels.

After the merger, the new firm -- Faegre Baker Daniels -- will have more than 700 attorneys and be the largest law firm in Minnesota.

David Phelps • 612-673-7269

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