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LAW THE 3 PERCENT COMMISSION

By Sally Giddens |

Restaurant guys Phil Cobb and Gene Street thought they had washed their hands of their Prufrock Restaurants chain (Dixie House, Black-eyed Pea) when they sold it in October of 1986 to a division of Unigate PLC, a British conglomerate. Cobb and Street pocketed more than $45 million from the sale. But soon after the deal was clenched, one Dwayne Evans, a business broker from Houston, filed suit against the two and Prufrock, claiming he had set the deal up and was entitled to at least a 3 percent commission, or $1.35 million.

Here’s the story: more than a year before Cobb and Street sold their restaurants, Evans was contacted by an officer of Casa Bonita, a subsidiary of Unigate. The officer said Unigate was in the market for some more restaurants. Evans says he did his research and thought Prufrock would be a likely candidate. After several meetings with Cobb and Street, Evans sent them a draft of a commission agreement.

“We didn’t sign it,” Cobb says. “About six months later we hired an investment banker to sell our company. We started with a list of about thirty companies, which was finally narrowed to two. Unigate was one of the two.”

“The next thing 1 knew,” Evans says, “a friend of mine from Dallas was calling me saying, ’Have you heard about the sale?’”

Initially, a court granted Cobb and Street a summary judgment on the basis that the sale of the company was in fact a real estate deal; by law, Evans would have to produce a signed contract to be paid. But this summer, that decision was reversed on appeal. So the case is likely to go to trial. If it does. Evans holds an interesting trump card. His attorney in Houston says that a deposition revealed that Cobb and Street had called Evans “to try and set him up,” and, while tape-recording the conversation, one of them said,’” ’we know we owe you something, Dwayne.’

“They ended up trapping themselves,” the attorney says.

Meanwhile, Cobb and Street maintain they don’t owe Evans anything. But, Cobb says, “I don’t blame him for suing us. It’s his big chance for big bucks.”