The legal drama surrounding vegan fast-casual chain By Chloe continues.
Celebrity chef Chloe Coscarelli, By Chloe’s co-founder, has filed a trademark infringement lawsuit against the chain’s investors, most of whom are part of the group that bought the concept out of bankruptcy earlier this month.
As part of the bankruptcy proceedings, By Chloe’s stalking horse bidders are obligated to come up with a new name for the concept.
Coscarelli is asking a jury to decide the case, which covers the use of the trademark before the bankruptcy sale. It is headed to a pre-trial conference on July 27.
“This case is about a circle of greed,” Coscarelli’s complaint, filed early this week in the U.S. District Court in the Southern District of New York, began.
Named defendants in the case are Bain Capital Double Impact Fund, Kitchen Fund, Qoot International and others.
Bain Capital Double Impact fund declined to comment on the suit.
Coscarelli, who has appeared on the Food Network, alleges in the lawsuit that By Chloe’s former owner, ESquared Hospitality “intended to ‘milk Chloe’s name ‘til we can’t!’” according to the filing.
Investors bought into the company to allow it to add locations and increase the chain’s valuation, Coscarelli said.
“They sought to maximize their internal rate of return by exploiting what the company referred to as its ‘crown jewel asset’—the trademark featuring Chloe’s name,” she said in court documents.
The defendants in Coscarelli’s suit eventually contributed more than $30 million to expand By Chloe, she said.
By Chloe’s owner controlled Coscarelli’s website and social media accounts, leading to the wrongful assumption that the celebrity chef was still involved in the concept, she alleged.
Coscarelli has long been embroiled in legal challenges against the chain that bears her name.
Less than a week after By Chloe secured a $31 million investment in 2018, Coscarelli filed her first trademark infringement suit against the chain’s then-owners.
By Chloe’s then-owner, BC Hospitality Group, declared bankruptcy late last year.
The chain was once considered a rising star among emerging fast-casual chains. It currently lists 10 U.S. locations on its website, two of which are noted as being temporarily closed.
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