I like and respect Marcus Lemonis, who stars in the show The Profit. He's a smart, accomplished guy and knows what he's doing.
In season 2, he visited A. Stein Meat Products in Brooklyn. A. Stein was struggling financially, had all kinds of problems, and Lemonis made an offer of $1 million for 50% ownership of the company. But it then came out that A. Stein was in worse shape than Lemonis had believed, and Lemonis withdrew his offer.
But A. Stein did have something that interested Lemonis. They (it's complicated) owned trademarks (character and logo) in a hamburger brand called Brooklyn Burger. Lemonis offered $200,000 to buy the Brooklyn Burger trademarks/brand. As he usually does, Lemonis did not have a written contract but just shook hands on the deal with the A. Stein guys.
Ultimately, Lemonis wired $190,000 to A. Stein. Well, it turns out that before Lemonis entered the picture, A. Stein had signed over a security interest in the trademarks to a lender, and A. Stein had agreed not to sell the trademarks to anyone else. Eventually, the lender took possession of the trademarks after A. Stein defaulted on the loan, and sold the trademarks to another party.
So Lemonis never got anything in return for his $190,000. Supposedly, A. Stein offered to give Lemonis his money back, but Lemonis refused, he wanted the trademarks.
In 2014, Lemonis hired very expensive lawyers and sued A. Stein in federal court for breach of contract and other things, trying to force A. Stein to fulfill its part of the agreement and hand over the trademarks.
After a motion to dismiss by the defendants, the court held that the hand-shake agreement was not enforceable as a contract because it was not in writing. Lemonis' lawyers tried to argue that the videotape of the show was good enough; the court said no.
However, under New York law, where there is no enforceable contract, but you have given something of value to another party without fair compensation, you may be able to sue for "unjust enrichment". The court held that the case could proceed on an unjust enrichment theory.
Eventually, the case settled on undisclosed terms.
It looks like A. Stein never had the legal ability to give Lemonis the trademarks; and once Lemonis learned this, he should have just taken his money back and walked away. (I.e., it was impossible for A. Stein to perform its consideration under the agreement, and the proper remedy would be rescission.) He also needs to stop doing hand-shake deals--or that's what I would tell him.
In season 2, he visited A. Stein Meat Products in Brooklyn. A. Stein was struggling financially, had all kinds of problems, and Lemonis made an offer of $1 million for 50% ownership of the company. But it then came out that A. Stein was in worse shape than Lemonis had believed, and Lemonis withdrew his offer.
But A. Stein did have something that interested Lemonis. They (it's complicated) owned trademarks (character and logo) in a hamburger brand called Brooklyn Burger. Lemonis offered $200,000 to buy the Brooklyn Burger trademarks/brand. As he usually does, Lemonis did not have a written contract but just shook hands on the deal with the A. Stein guys.
Ultimately, Lemonis wired $190,000 to A. Stein. Well, it turns out that before Lemonis entered the picture, A. Stein had signed over a security interest in the trademarks to a lender, and A. Stein had agreed not to sell the trademarks to anyone else. Eventually, the lender took possession of the trademarks after A. Stein defaulted on the loan, and sold the trademarks to another party.
So Lemonis never got anything in return for his $190,000. Supposedly, A. Stein offered to give Lemonis his money back, but Lemonis refused, he wanted the trademarks.
In 2014, Lemonis hired very expensive lawyers and sued A. Stein in federal court for breach of contract and other things, trying to force A. Stein to fulfill its part of the agreement and hand over the trademarks.
After a motion to dismiss by the defendants, the court held that the hand-shake agreement was not enforceable as a contract because it was not in writing. Lemonis' lawyers tried to argue that the videotape of the show was good enough; the court said no.
However, under New York law, where there is no enforceable contract, but you have given something of value to another party without fair compensation, you may be able to sue for "unjust enrichment". The court held that the case could proceed on an unjust enrichment theory.
Eventually, the case settled on undisclosed terms.
It looks like A. Stein never had the legal ability to give Lemonis the trademarks; and once Lemonis learned this, he should have just taken his money back and walked away. (I.e., it was impossible for A. Stein to perform its consideration under the agreement, and the proper remedy would be rescission.) He also needs to stop doing hand-shake deals--or that's what I would tell him.
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