Talk about twisting the knife.
The Palm filed for bankruptcy this year after a judge ordered the owners to hand over $120 million to cousins who’d claimed they’d been unfairly cut out of their share of the legendary steakhouse chain’s profits over many decades. On Thursday, the judge ordered the owners to pay their cousins’ $4.6 million in legal fees, too.
In her ruling, New York state Judge Andrea Masley praised the cousins’ lead attorney, Fred Newman for his more than six years of work on the case, which involved collecting financial records dating back to the 1970s, deposing two dozen witnesses, filing gobs of motions and counter-motions, all of which culminated with a two-week trial two years ago. Newman, of the law firm Hogut Newman Regal & Kenny, charged $675 per hour for his work.
“The court’s observations of his trial skills, and particularly those of his colleagues…were extraordinary,” Masley wrote, adding their requested fee was “reasonable.”
The Palm opened its doors in 1926 and was the godfather of New York steakhouses, with floors covered with sawdust and walls filled with celebrity caricatures, while uniformed waiters navigated the tightly packed tables with platters of cold seafood appetizers, stegosaurus-sized steaks, monstrous lobsters and cheesecake for dessert. The original Palm closed four years ago but the party rolls on at Palm Too, which operates across from the original on Second Avenue in Midtown. The New York Times gave the original Palm a four-star review in 1976.
Flush with success, the founders' grandsons, Walter “Wally” Ganzi and Bruce Bozzi, decided to open more Palm steakhouses and set up a separate company to house the more than 20 new restaurants. Ganzi and Bozzi exclusively owned the new Palm steakhouses and decided that other family members who held a 20% stake in the original would share in an annual royalty payment of $6,000 per additional restaurant. That miniscule fee was the center-cut of the lawsuit brought by the cousins, Claire Breen, Charles Cook and Gary Ganzi, who claimed they were deprived of millions in royalties over many years.
After Masley ruled in the cousins’ favor, Ganzi and Bozzi had their company file for bankruptcy in March of this year. In August a bankruptcy-court judge lifted a stay so the fees owed Newman and his partners could be determined.
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November 22, 2019 at 10:21PM
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Food fight: Judge orders Palm steakhouse owners pay their cousins' legal fees - Crain's New York Business
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