Business breakups are rarely easy, clean-cut transactions. Kent Rathbun’s recent fallout with his majority partner Bill Hyde appears to be headed to an ugly ending.
Rathbun and Hyde formed H2R Restaurant Holdings in August of 2007. Their mutual goal was to roll out Kent Rathbun projects. Rathbun was the idea man and chef; Hyde provided the money and other business services.
On June 2, Rathbun resigned from the day-to-day activities of all of the companies he and Hyde have formed. Rathbun intimated he would stay involved in some capacity. That might not end up being the case. On the same day Rathbun filed legal papers to regain the right to use his name in future businesses. He’s suing H2R Restaurant Holdings, LLC d/b/a Abacus Jasper’s Restaurant holdings; Rotisserie Two, LLC d/b/a Rathbun Blue Plate Kitchen and d/b/a Kent Rathbun Catering; Kent Rathbun Elements, LLC, and Briarwood West Investments, LLC.
According to the document, Rathbun signed away the rights to his name in 2009.
On March 2, 2009, more than two years after the formation of H2R Restaurant Holdings, LLC, Hyde placed in front of Rathbun a document entitled “Assignment of Rights to Use of Name and Likeness” (hereinafter the “Agreement”) and told him it needed to be immediately executed by Plaintiff as a condition to moving forward with company business. That Agreement is the subject of this Declaratory Judgment action and is attached hereto as Exhibit “1”. 11. There was no consideration given, offered or promised in exchange for the execution of the Agreement. Rathbun signed it under duress; being told that it was a formality, but one required for continued operations of the then-existing restaurants.
Yes, he signed it. Times were tough in 2009. Almost every chef and restaurant in Dallas needed money. It’s easy to say Rathbun sold out. It’s just as easy to say Hyde took advantage of Rathbun. I’d bet that when they recently talked about the future of the company Rathbun’s signature on that document became both a talking and tipping point. (Mico Rodriguez had a similar experience. He lost the right to use his name when he and his Mi Cocina partners split. The circumstances were different and Mico received a payment that, if accepted, he would give up the right to his name.)
Rathbun claims the agreement is unenforceable because it is not a contract. The doc states:
“There was no offer and acceptance and no meeting of the minds. No consideration was received by Rathbun for its execution.” It goes on to say: “The Agreement is impermissibly vague and violates the statute of frauds because it grants a right in perpetuity to the Defendants to the exclusive use of Rathbun’s personal identity, likeness name and reputation.”
It will be messy, but Big Daddy is called Big Daddy for a reason. He’s smart, he’s a survivor, and he’ll work the angles. If he has to legally change his name to Big Daddy, then I’m sure we’d all flock to Big Daddy’s for shrimp shooters.
