Gary Ganzi and his sister, Claire Ganzi Breen, sued their cousins back in 2012 for allegedly cheating them out of millions of dollars in royalties over the course of more than 40 years. A state court judge in Manhattan sided with the Ganzi siblings, saying the actions of the defendants, Walter Ganzi Jr. and Bruce Bozzi Jr., constituted a breach of fiduciary duty in which they prioritized their own financial wellbeing above the responsibility they bore their shareholders.
The defendants are the grandsons of the original founders of the iconic Palm steakhouse, and together they own a controlling share of the company, Just One More Restaurant Corp., which owns the chain of restaurants. They have opened more than 20 Palm restaurants across the U.S. and have licensed intellectual property related to the restaurant, including the right to use the name, logo, and the look and feel of the original Palm. The Ganzi siblings own all that intellectual property and the defendants allegedly licensed that property from them every time they opened a new Palm restaurant.
The price of licensing that intellectual property was set at a flat rate more than four decades ago, and as a result, the Ganzi siblings have been paid $6,000 in licensing fees for every new Palm restaurant that opens, but they claim that it’s worth much more.
Despite being a chain, the Palm is a family restaurant that has been owned and operated by the same family since the first restaurant was opened in Manhattan in 1926. But now disputes over money and issues of who owns what has divided the family and landed them in court.
Since the lawsuit was filed Ganzi and Bozzi have both filed for bankruptcy. Their creditors include the IRS and their cousins who are suing them. Back in March, the Palm restaurant chain, along with all its associated intellectual property, was sold for $45 million to Landry’s, a company based out of Houston, Texas. The proceeds of that sale will be used to pay off Ganzi and Bozzi’s debts, and timing of the sale proved to be fortunate for their creditors since it happened right before the U.S. was shut down due to the COVID-19 pandemic and restaurants lost most of their value as a result of having to at least partially shut their doors.
Then in June, the massive legal battle, having dragged on in the courts for 8 years, was finally put to an end when the parties reached a settlement that is expected to total somewhere between $12 million and $18 million. The bulk of that amount will go to the Ganzi siblings.
An attorney representing the Ganzi siblings said they are happy to get fair payment and to finally put the years of legal squabbling behind them, although they are unhappy to have lost the family’s inheritance, even if the sale did happen at a time that benefited them. They also said that the Landry’s is a fine company and that they have no doubt that it will succeed in restoring the Palm restaurants to their former glory.
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