Last June, there was a major breakup in the restaurant business. Bill Hyde Jr. and Kent Rathbun, partners at Kent Rathbun Concepts, started their ugly divorce when Rathbun resigned from the company which bears his name. He also relinquished his day-to-day activities at of Jasper’s, Abacus, or Hickory.
Hyde, the former CEO of Ruth’s Chris Steak House, purchased a majority of KRC in 2007 after Rathbun’s initial investor Robert Hoffman died in 2006. It was a good almost ten years. They rolled out locations of Jasper’s and Hickory. They made deals to open new concepts in airports. Sure a few of them didn’t work out, but the bullet was shooting up.
Behind the scenes the two had disagreements. Rathbun says he “tried three times to buy him out,” but Hyde said no. Rathbun says he asked to be bought out. The answer was no.
The crack stems from the agreement Rathbun signed with Hyde in 2009. Tucked into what Rathbun refers to as a “mountain of papers” that formalized their agreement was an “Assignment of Rights to Use of Name and Likeness.” It’s like a prenup before you get married. You sign it because you love and trust your partner and you can’t imagine that person would do anything to hurt you. “I didn’t realize I was signing away future business,” Rathbun says. “Or that I would never have the right to use it.” So, on June 2, 2016, Rathbun sued his former partner. According to the document, Rathbun signed away the rights to his name in 2009 under duress.
Local restaurateur Mico Rodriguez learned this lesson the hard way. When he was booted out of his MCrowd Corporation, his partners didn’t allow him to use his name. But majority owner Ray Washburne tells me they “didn’t really enforce it much because we’re friends.”
I have to admit, I thought Hyde would rethink his hardline position when, horror of horrors, Rathbun was badly injured in an ATV accident in early November. Rathbun made a remarkable recovery from life-threatening injuries and got back on his feet fairly quickly. But Hyde remained firm. Rathbun was not allowed to use his name or his likeness.
Rathbun’s wife Tracy, co-owner of Shinsei and a minority partner in the new Chelsea Corner, was busy working on the new restaurant. Pre-opening posts on social media showed pictures of the food attributed to #Chefwithnoname. When the place opened, I wrote:
A local famous chef, who has lost the rights to use his name, is writing the menu and training the chefs in the kitchen. #Chefwithnoname is also married to Tracy.
Photos of #Chefwithnoname with a skillet in front of his face started popping up on social media. The Chelsea Corner Facebook page posted a video with a skillet-faced #Chefwithnoname and #Chefwithabigname Bobby Flay as they whipped up some Super Bowl recipes.
While the chefs talked about tomatillos, Hyde filed a whopper of a lawsuit last Wednesday. Quick translation before the giant block of text below scares you away, the corporation is “seeking monetary relief over $1,000,000.” That’s a lot of #freakingskillets.
Hyde is playing hardball:
As the Executive Chef, member of Senior Management, and part owner of H2R, Rathbun owed a fiduciary duty to H2R. In addition and/or in the alternative, Rathbun owed a fiduciary duty to H2R because a relationship of trust and confidence existed between Rathbun and H2R, and for which Rathbun was given a 25% equity position as a Member… Rathbun failed to comply with his fiduciary duty to H2R by, among other things: a. engaging in transactions that were not fair and equitable to H2R; b. not making reasonable use of the confidence that H2R placed in him; c. failing to act in the utmost good faith or exercise the most scrupulous honesty toward H2R; d. placing his own interests before H2R’s, using the advantage of his position to gain a benefit for himself at the expense of H2R, or placing himself in a position where his self-interest might conflict with his obligations as a fiduciary; e. failing to fully and fairly disclose all important information to H2R concerning the transactions; and f. usurping corporate opportunities of H2R. 21. As a result of Rathbun’s breach of his fiduciary duty, H2R is entitled to equitable relief, including but not limited to rescission, constructive trust, profit disgorgement, and fee forfeiture, and injunctive relief. 22. In addition, Rathbun’s breach of his fiduciary duty has caused injury to H2R, which has resulted in H2R’s sustaining actual damages in the past and that, in reasonable probability, will be sustained in the future, including but not limited to lost profits.Rathbun’s tortious interference has caused injury to H2R, which has resulted in H2R’s sustaining actual damages in the past and that, in reasonable probability, will be sustained in the future, including but not limited to lost profits.
I called Mr. Hyde and he refused to comment until after April 8, the court date for Rathbun’s suit. Rathbun says, “As far as I’m concerned, I really just want to move forward with my life. I have a family to take care of and this requires that I work in the field that I have spent 40 years building my career in. I really hope that we can resolve this without me using a new name for the rest of my life.”
Meanwhile, #Chefwithnoname continues to work with Tracy Rathbun and her partner Lynae Fearing. The group is opening Lover’s Seafood Market in the former Rex’s spot on Lovers and a new concept at Inwood and Forest called Republic. Last night, #Chefwithnoname told KRLD’s David Johnson that Republic will be “Texas-style food and spirits.”