Seven Restaurant's Owner Sued, Accused Of Using It As 'Personal Piggy Bank'
MINNEAPOLIS (WCCO) -- The investors in a prominent downtown Minneapolis restaurant and nightclub have filed a lawsuit against the restaurant's main owner, alleging that he falsified financial records, concealed information from partners and used the restaurant as "his personal piggy bank" while being drunk and high on the job.
A court has issued a temporary restraining order, banning David Koch from the premises of Seven restaurant at 700 Hennepin Avenue in Minneapolis.
According to the complaint filed in Hennepin County Court on Oct. 18:
• David Koch "acted as if Seven and the LLC were his personal piggy bank and solely-owned business."
• Filed for bankruptcy in 2009 without counsel of the investors, only disclosed when he needed signatures on the legal documents.
• "Koch has intentionally kept [investors] in the dark about the business"
• In 2010, made a distribution to Koch Hospitality and Koch's wife "of over $500,000 but did not make distributions to other members."
• "Koch has recently taken out high-interest loans in excess of $1,000,000 in the name of the company… to buy restaurant equipment but no new equipment has been purchased." The interest payments on the loans are in excess of $10,000 daily.
• Investors say they "observed Koch drinking heavily to the point he was incoherent… noticeably under the influence of drugs or alcohol on virtually every occasion he was observed."
• Investors allege that Koch takes cash from bars on Seven's patios and "uses the cash for his personal needs or desires."
• Investors allege Koch hired a "consultant" for $100,000 and furnished a downtown Minneapolis apartment.
The investors include David Anderson, Jeffrey Carlson, Jerome Gardner, Alex Luebbert, Oscar Luebbert, Thomas Keran, John Peabody, Lori Youmans and David Youmans. According to the complaint, investors put in between $58,000 on the low end and $242,000 on the high end in 2006 and 2007 to be partners in the company managing Seven, a sushi and steak house with a popular rooftop patio.
Koch told WCCO he disputes everything in the lawsuit.
"I have done nothing but given years of my life to that place," Koch said. "These people have gotten thousands of dollars, that includes complimentary meals that they've eaten in the thousands of dollars, in the past nine years that they didn't bother listing."
Koch disputes the claims that he abused drugs and alcohol.
"I have a torn rotator cuff and knees that I have to get quarterly shots in," Koch said. "I have a lot of pain."
He also said he was notified of the suit on Wednesday and had no knowledge of the complaints prior to then.
"I work almost 24/7 and I can't get them to come into work," he said. "My doors have been wide open and they have been told to come in any time they would like to."
Koch also said he and his wife work an average of 180-200 hours combined each week and that the restaurant has brought in somewhere between $60,000 and $70,000 in the last three days.
The next court hearing will be on Oct. 24.