The owners of Williamsburg cult favorite Japanese fish restaurant Okonomi are apparently undergoing a messy business divorce — partner Tara Norvell is suing owner Yuji Haraguchi for pushing her out of operations and blocking her from the restaurant’s profits, according to a lawsuit. Norvell is now asking the court to dissolve the restaurant’s business, a move intended to push Haraguchi to buy her out after a year of failed negotiations outside of court. "She would like to resolve this and move on," says her attorney Kevin O’Donoghue.
According to the suit and O’Donoghue, Haraguchi fired Norvell from the restaurant last August, and she agreed to leave after being told she would still get paid. She maintained part ownership in the restaurant. But by the end of 2015, Haraguchi filed papers that both ended the payment of her salary and increased his own salary retroactively to $145,000, up from $48,000. The retroactive salary increase lowered profits for 2015, effectively blocking her from them. Norvell also claims that Haraguchi is damaging the business by misusing funds, including using the restaurant’s cash to pay for his wedding and honeymoon. She hasn’t gotten payouts from profits, and in May, he reduced her equity in the restaurant from 25 percent to 14.6 percent.
O’Donoghue — who specializes in hospitality partnership law and has worked on cases for The Lion, Pig and Khao, and Roberta’s — argues that Haraguchi didn’t have the right to reduce Norvell’s ownership and that the other moves were unnecessary actions to hurt her. Though the lawsuit asks for a dissolution, she just wants Haraguchi to pay her out for her portion of the company, O’Donoghue says. "Instead of settling the case, they just continued to harm her," he says.
Haraguchi has not responded in court, but he said in a statement that he would defend the restaurant:
August 1st, 2015, Tara Norvell agreed to leave Okonomi. August 1st, 2016, after having been entirely absent from the company for a year, she asked the Court to shut down Okonomi completely as an emergency order, claiming the company was not functional without her. Okonomi is no longer my dream alone. It's みんなの夢. ["Everyone’s dream"] It's the dream of my entire team, which has flourished and grown, since she left. I am going to defend this dream by any means necessary for my family, staff and customers.
Norvell and Haraguchi met in 2012 at Roberta’s, where Norvell worked as chef and Haraguchi sourced seafood. They started working on Yuji Ramen and Okonomi together as a pop-up, first at Smorgasburg and then at Kinfolk Studios and Whole Foods. The tiny restaurant at 150 Ainslie St., which is well-known for its fish-focused Japanese breakfast, opened in 2014 and became a critical hit. According to documents in the lawsuit, Okonomi made a profit of nearly $80,000 in 2015. Haraguchi also opened a specialty fish market last week to sell fresh fish to home cooks.
It’s not clear what sparked the rift between Norvell and Haraguchi. Initially, Norvell wanted $500,000 for her portion of the business, but O’Donoghue says she is now asking for a "very reasonable" sum that’s less than that. "She’s really sad, too," O’Donoghue says. "She loved that company. She built that restaurant."