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By Chloe Chef Ousted For ‘Gross Negligence’ of Vegan Fast-Casual Company

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Chloe Coscarelli split with partners ESquared for the popular restaurant

Chloe Coscarelli Chloe Coscarelli

Celebrity chef Chloe Coscarelli was pushed out of By Chloe after an arbitrator determined that she was being “grossly negligent” of the vegan fast-casual chain she co-founded, according to documents from the legally binding process — including losing leases on new spaces and sabotaging deals with business partners.

The chef — who rose to fame after being the first vegan chef to win a TV cooking competition — founded the restaurant in 2015 with Samantha Wasser, daughter to mega-hospitality group ESquared CEO Jimmy Haber. The relationship unravelled last summer, and Coscarelli sued ESquared, alleging that Haber wanted her restaurants to serve meat.

But Wasser says the claim is “outrageous,” and they never planned to stray from being vegan. She also alleges that Coscarelli has been less involved with the business and has undercut its success for some time. Wasser pointed to several pages of the arbitrator’s findings, the result of a 12-day hearing with some 4,000 pages of transcripts, more than 600 exhibits, and seven witnesses.

Legal documents shared with Eater show that the arbitrator thought several of Coscarelli’s actions qualified as “gross negligence” of the business, a term defined as an active failure to protect property.

In one case, Coscarelli halted a project where By Chloe would collaborate with other vegan chefs, according to Wasser and the arbitration findings. Wasser tried to get vegan chefs not employed by the company to publish their recipes on the By Chloe blog — a situation she considered a “win-win” that would raise the profile of the chefs and help By Chloe develop a relationship with the vegan community, Wasser says.

But according to the arbitrator, Coscarelli “interfered” with the contracts, pushing two of the four chefs to back out of the project. The arbitrator considered it “gross negligence” of the business.

Sweets by Chloe
Sweets by Chloe bakery
By Chloe

In another incident, Coscarelli “did not act in a manner to try to save” a lease that the company was trying to sign near Barnard College, according to the arbitrator’s findings. Wasser says that By Chloe was close to signing a lease for a space near the university, but after Coscarelli had a conversation with the landlord, they pulled out of the deal. It was not clear what happened or why the landlord ended the arrangement. The arbitrator wrote in her findings that Coscarelli’s “testimony was less than candid” in the matter and also labeled it as “gross negligence.”

And in yet another incident, according to the arbitration testimony, Coscarelli was apparently paid to appear in a video sponsored by SmartWater and created by Vox Creative, the advertising arm of Eater’s parent company. The sponsorship funds should have gone to By Chloe, but it’s not clear what happened to the money, according to the arbitration summary. The arbitrator did not consider this “gross negligence” but wrote that Coscarelli’s “lack of candor about the payment was troubling.”

Ultimately, the arbitrator agreed that Coscarelli could be removed from the company.

Coscarelli’s attorney Lisa Bloom said in a statement that the chef is “a rock star in the vegan community” who has been “a true inspiration to all of us who love animals and care about healthy food and a sustainable planet.” “We will not stand for petty people trying to tear down the hard-earned reputation of this pillar of our community,” the statement says.

Meanwhile, Wasser just wants people to know that she is committed to keeping By Chloe the same vegan restaurant that it’s always been. Since news broke about the split, people in the vegan community have allegedly been sending Wasser and ESquared death threats — many under the belief that ESquared pushed Coscarelli out so that they could start serving meat products. She doesn’t blame them for supporting Coscarelli but wants them to know her side, too.

“The vegan community had been so critical to our success,” she says. “The fact that people think we would ever want to put meat on our menu is the most ludicrous thing.”

During the legal process, By Chloe opened several more locations, including outposts in Brooklyn and outside of New York City. Wasser and ESquared, which is funding By Chloe, plan to keep expanding at the same rate, with the same vegan menu.

by CHLOE

185 Bleecker Street, New York, NY

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