Chef Erik Bruner-Yang sued his former partners in Toki Underground in June for allegedly attempting to “destroy” his reputation and coerce him into involving them in his other business ventures.
Now, Toki Underground parters Jeff Jetton and Praveen Goyal have filed a countersuit in DC Superior Court denying Bruner-Yang’s claims and alleging, among other things, that the chef inappropriately used $578,000 in company funds for unauthorized expenses including sex toys, a fur coat, tattoos, liquor, parking tickets, DVD rentals, movie tickets, date-night restaurant expenses, jewelry, Valentine’s Day purchases, vacation resorts, student-loan repayments, ATM withdrawals, and more.
The lawsuit also claims that Bruner-Yang used Toki Underground accounts to buy equipment and supplies for his H Street restaurant, Maketto. It further alleges that there’s a $114,000 revenue discrepancy from Toki Underground’s operation of a food stall in Union Market as well as $130,000 from Toki Underground events that were never received by the restaurant.
“Yang fraudulently misrepresented that certain purchases and items he sought reimbursement for were Toki expenses, when in fact they were personal expenses and expenses for his competitive businesses,” the suit claims.
But Bruner-Yang’s attorney, Jeremy Schulman, says “we’re 100 percent confident” that every expenditure that Toki Underground is challenging was justified and directly related to the business. He declined to go into specifics.
“I have made every attempt to resolve this dispute amicably,” Bruner-Yang says in an statement emailed to Washingtonian. “Unfortunately, Jeff Jetton and the other Toki Underground investors are not interested in a reasonable resolution and instead wish to pursue baseless and extortionate claims. I refuse to be held hostage by these individuals and will not grant them rights that they do not deserve. My family and I welcome the opportunity to address this in court and are confident that we will prevail.”
Jetton and Goyal declined to comment. Their attorney was not immediately available.
The Toki Underground partners also claim in their countersuit that Bruner-Yang “usurped” a deal to operate a restaurant in The Line DC hotel, which is opening in Adams Morgan in 2017. The collective Toki Underground team started negotiations with Sydell Group, which owns the hotel, in 2013, but the ramen shop partners were not involved in the final deal. Bruner-Yang claimed in his lawsuit that he pursued his own food and beverage management deal with the hotel as part of a different partnership, EBY Hospitality Group, only after the initial arrangement with the Toki Underground team collapsed.
Still, Jetton and Goyal’s lawsuit claims that Bruner-Yang entered into an agreement in September 2015 to give 25 percent of all income from the hotel project to Toki Underground. The lawsuit also alleges that Bruner-Yang spent $22,000 in Toki Underground funds to develop the hotel project, including $10,000 in expenses made as recently as March. Sydell allegedly reimbursed Yang $16,000 for these expenses and $45,000 in development feels, “which were never provided to Toki,” the complaint says.
“It’s a shakedown,” Schulman says. “This whole case they’ve raised, even with the expenses, is really just an effort to shake Erik down and try to profit from his efforts that had nothing to do with Toki Underground.”
The Toki partners likewise contend that Paper Horse, Bruner-Yang’s ramen spot inside Whole Foods, was originally a Toki business opportunity that the chef similarly converted for himself. They also claim that Paper Horse, Maketto, and Bruner-Yang’s Union Market stall Honeycomb violate a non-compete clause in the chef’s operating agreement because their menus are too similar to Toki Underground.
“It’s a ridiculous claim,” Schulman says. In Bruner-Yang’s original lawsuit, his legal team claimed the chef was released from that non-compete and original operating agreement after he was removed as a managing partner at Toki in September 2014. “None of what he’s doing would even be inconsistent with the language, even if it applied,” Schulman says.
“Erik is a young guy. He’s on the rise in this culinary world, and they’re trying to take advantage of him, trying to manipulate him, and trying to get something to which they’re not entitled,” Schulman says. “We’re not going to allow him to be bullied and intimidated by these guys.”