(Bloomberg) -- Acclaimed chef Daniel Humm says boutique hotel operator Sydell Group stiffed him out of almost $2 million after he agreed to give up control of the food and beverage operations at its NoMad hotels in New York and Los Angeles.
Humm, the owner of the renowned Eleven Madison Park, says in a lawsuit filed in New York state court Monday that the company agreed to pay him $1.89 million last February to resolve a dispute over almost $6 million in outstanding management fees and reimbursable operating expenses.
Humm and former partner Will Guidara ran the restaurants, bars, catering, events and room service at NoMad hotels for nine years under the name “Make It Nice” before they decided to separate in 2019. While Sydell initially supported a plan for Humm to take over the operations, it later threatened to end their relationship, according to the lawsuit.
Sydell called the lawsuit baseless and inaccurate in almost all respects.
After Humm and Guidara ended their working relationship, Sydell lost confidence in Humm’s ability to operate at the level expected on his own, the company said in an emailed statement.
“We believe that our partnership with Make It Nice could have flourished for many years, but the changes to their business structure and the lack of focus that ensued made that simply impossible,” Sydell said. “We believe that this lawsuit is intended to be a distraction from those facts.”
Humm and Guidara opened the NoMad restaurant in New York City in 2012, a year after they bought Eleven Madison Park, which went on to be named World’s Best Restaurant for 2017. NoMad’s handsome dining room became a destination for dishes like its signature roast chicken for two and for the artisanal cocktails at its power bar scene. In 2018, Humm introduced two outposts, at the NoMad Los Angeles and the NoMad Las Vegas in the Park MGM, that followed the same formula of luxury comfort food.
To “preserve the goodwill among the parties” and avoid litigation, Humm says in the suit, he agreed to resolve the dispute early last year, but Sydell hasn’t paid him. He claims breach of contract and seeks to enforce the settlement agreement or recover all outstanding management fees, and alleges that Sydell unjustly enriched itself by continuing to use the trade secrets and intellectual property developed to create the restaurants.
‘Took a Mile’
“By mid-March, having vacated the restaurants nearly two months prior, and having believed he had an agreement with his long-time business partners whom he trusted, Mr. Humm, now beleaguered, acquiesced to some of these additional demands,” the suit says, referring to a broader release of legal claims that had already been agreed on and permission to use some of Humm’s recipes at the hotels.
“But for every inch Mr. Humm continued to offer, defendants shamelessly took a mile in return,” according to the suit.
Billionaire Ron Burkle and developer Andrew Zobler teamed up more than a decade ago to develop and operate boutique hotels. Burkle sold a 50% stake in the company to MGM Resorts International in August of 2019, according to the Wall Street Journal.
The case is Sympathy for the Devil LLC and Hot Lips LLC v. 1170 Broadway Tenant LLC and 649 South Olive LLC, New York State Supreme Court, New York County.
(Updates with Sydell comment)