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May 22, 2018

Judge rules in favor of Chef Jose Garces in lawsuit with investors

A N.J. judge ruled in favor of Garces

Lawsuits Jose Garces
jose garces David M. Warren/Philadelphia Inquirer; MCT; Sipa USA

Chef Jose Garces, from left, offers knife skill tips to future culinary students Juventino Martinez, Javier Aguilar and Jeronimo Cabrera as they slice red onions at the new Culinary Literacy Center at the Free Library of Philadelphia, June 2, 2014.

Philly chef Jose Garces has escaped hot water yet again in the latest threat to his culinary empire.

Garces has been in a legal dispute with three minority investors who sued to take managerial control of his first three restaurants, all of which are in Philadelphia: Village Whiskey, Tinto, and his flagship Amada.

Investors sued after an announcement in early May when Garces filed for Chapter 11 bankruptcy and announced a new partnership with Ballard Brands.

On Tuesday night, the U.S. Bankruptcy Court in New Jersey ruled in favor of Garces, dismissing the claims of Jim Sorkin, and Tom and Maria Spinner, who claimed Garces did not have the right to file Chapter 11 bankruptcy, according to court documents.

Sorkin and the Spinners had alleged that Garces “systematically” breached financial agreements “for his own benefit” and had been conducting unauthorized cash sweeps for at least seven years. Sorkin and the Spinners also claimed that they had voted to take over the company back in January, but Garces ignored the vote.

In a statement sent to PhillyVoice, Garces said:

Today is a proud day for me. This ruling proves that I have adhered to fair and legal business practices. It not only confirms claims made by these investors completely false, but also that they are the ones that have perpetrated a litigious sham based off contrived ignorance on how we have run our business for more than a decade.

The fact is that I have always – in good times and challenging – put our employees and the success of our entire enterprise at the forefront. These investors have proved with the rejection of lucrative deals that this was always only about them.

We eagerly look forward to completing this process, joining our new partners and building a successful future alongside them. With this victory, we can get back to focusing on what we do best – providing excellent food and hospitality to our loyal customers. ​​