The NYC franchisee suing well-liked chain Bareburger for shady business practices has actually been accused of the same thing by his original franchise partners.
Michael Pitsinos — who accused the company of sabotaging his restaurants — is being sued by his original partners for alleged “grossly negligent” and “reckless” business mismanagement, according to the suit.
The restaurateur owns five Bareburger locations along with two other people, including in FiDi, Chelsea, and the Upper West Side. But three of those locations are also owned with minority owners, who filed a lawsuit last May accusing Pitsinos of improperly charging expenses and paying his own salary instead of paying state and federal taxes. They also claim Pitsinos and his partners loaned up to nearly $700,000 of restaurant money without approval.
It ultimately “burdened” the three Bareburger locations with expenses from the other two locations Pitsinos owns, the suit alleges. This included allegedly “draining the resources” of the three outposts to pay rent for a restaurant in Miami and failing to pay employees properly, all while paying themselves, the suit says.
Meanwhile, Pitsinos has his own lawsuit against Bareburger, blaming most of the financial woes on them. He claims it’s corporate owners who drove the businesses to the ground by not paying rent and other critical expenses while running the restaurants over the past two years. The franchisee claims the company wanted to thrust him into debt so they could buy his locations for less money. He is seeking $10 million from Bareburger.
But Bareburger CEO Euripides Pelekanos alleges that when he swooped in to run those franchises, the locations were already over $3 million in debt. He says in a statement that the franchisee failed to pay rents, vendors, taxes, and contractors.
Last week, Pitsinos threw his three Bareburger locations at 153 Eighth Ave., 795 Columbus Ave., and 111 Fulton St. — the ones that minority members are suing over — into bankruptcy court, which halted all impending litigation.
That’s seemingly good news for Bareburger’s CEO, who says, “We are happy that this case is now in federal court, where a trustee and a federal judge can review their financials and come to a logical conclusion.”
Pitsinos’ attorney could immediately be reached; the minority owners’ attorney did not immediately have comment.
The chain started in Queens in 2009 and now has more than 40 locations. New York has about 20 outposts, serving burgers and dishes tailored for vegetarians, vegans, and other people with dietary restrictions.