Financing

The CEO of Ruby Tuesday files a lawsuit over the sale of Fuzzy's Taco Shop

Shawn Lederman filed a lawsuit against the chains’ former owner, NRD Capital, arguing he is owed $1 million from the sale of the taco chain.
Fuzzy's Taco Shop lawsuit
The CEO of Ruby Tuesday argues he is owed $1 million from the sale of Fuzzy's Taco Shop. / Photograph: Shutterstock.

The CEO of Ruby Tuesday is suing the company’s former owner, arguing that he is owed $1 million in connection with the firm’s sale of Fuzzy’s Taco Shop to Dine Brands Global.

Shawn Lederman is suing NRD Capital, the private equity firm that once owned both chains, saying he is owed the funds as part of a 2017 agreement with the firm. Lederman was a principal with NRD between 2016 and 2019, when he was named CEO of Ruby Tuesday following the departure of Ray Blanchette.

NRD acquired Fuzzy’s in 2016 and sold the 138-unit brand earlier this year to Dine Brands, the owner of Applebee’s and IHOP, for $80 million.

Lederman’s lawsuit, filed in a Dallas County court in Texas, says he was paid salary and bonuses as part of his work for NRD, including a $250,000 bonus in 2020, $62,500 of which is yet unpaid.

In 2017, the lawsuit says, Lederman and NRD entered into an agreement in which the private equity firm would pay him profit interest in connection with the acquisition and potential sale of Fuzzy’s. The agreement vested after four years. That anniversary was reached on Sept. 19, 2020, according to the lawsuit.

Lederman’s last day with the firm was in February 2021, after Ruby Tuesday was sold out of bankruptcy. 

When Fuzzy’s was sold to Dine Brands, the Ruby Tuesday CEO argues, that triggered the 2017 agreement. Lederman is asking a court for documents in connection with that sale.

Aziz Hashim, NRD's CEO, called the lawsuit "an administrative matter" and said the company would look into the situation once it gets the lawsuit. 

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