Third Ward restaurant embroiled in dueling suits
Two estranged business partners who co-own the popular Turkey Leg Hut restaurant filed explosive lawsuits against each other earlier this month involving allegations of fraud, theft, embezzlement and self-dealing.
In a July 8 filing in Harris County state district court, Turkey Leg Hut co-owner Steve Rogers alleged that the restaurant’s majority owner, Nakia Price, is diverting “funds, customers, and supplies” to her other food trucks and catering businesses without compensating Rogers and other shareholders.
Price countered a week later with a lawsuit of her own, accusing Rogers of going to court in a “desperation move to squeeze money out of Price” to settle what she described as “heated negotiations” over a buyout of Rogers’ stake in the Third Ward eatery.
Rogers and Price last week agreed to a temporary restraining order that bars Rogers from interfering with the
restaurant’s business operations, withdrawing funds from its bank accounts or “transacting any business” on its behalf. Price, meanwhile, is prohibited from using Turkey Leg Hut funds, supplies and staff for her other businesses.
They are set to appear in court July 29 for a temporary injunction hearing.
The court proceedings mark the second legal battle for Turkey Leg Hut within the last eight months. The restaurant came under fire late last year from residents who alleged that its outdoor cookers were producing excessive smoke that posed health risks. The residents later dropped the lawsuit.
In his court filing earlier this month, Rogers alleged that Price in late June asked Turkey Leg Hut investors for more money, citing “the financial strain COVID-19 has caused,” despite records that he said show the restaurant generated more than $1.1 million in net sales that month. Rogers said he suspects the financial strain stems from Price’s alleged use of Turkey Leg Hut profits to support her “personal projects,” such as her nearby food truck that often draws customers who want to avoid the restaurant’s famously long lines.
Rogers said he does not have a stake in Price’s other businesses, which had served food prepared at the Turkey Leg Hut using the restaurant’s supplies and staff prior to the restraining order.
Price, in her counter suit, said Rogers has “embezzled thousands of dollars in payments made by a third-party company” to the restaurant and stolen funds to pay for “rent and equipment at two of his other business ventures or for a residence.” Rogers filed the lawsuit “in attempt to gain negotiating leverage and mask his own misdeeds,” Price alleged.
Price also issued a blanket denial to Rogers’ allegations. In her court filing, she said a provision of Turkey Leg Hut’s company agreement “expressly allows Members to engage in their own business ventures, whether or not such ventures compete with TLH, with no obligation to offer TLH or any other Member the right to participate in such ventures.”
Sherrie Handrinos, a spokeswoman for Price, said Rogers’ court filing includes “malicious and hurtful accusations that lead one to completely misunderstand the facts in this situation.”
The dueling lawsuits, first reported by Eater Houston, came about a month after Bar 5015 — the Third Ward establishment owned by Rogers — suffered more than $750,000 in damage from an early morning explosion. Video that surfaced days after the incident showed four men dousing the bar with flammable liquid and lighting the place on fire.
Price said Rogers “stole” Turkey Leg Hut’s $27,000 payment system and installed it at Bar 5015, which is located about two blocks south of Turkey Leg Hut on Almeda Road. The system was destroyed in the explosion, Price alleged in her court filing.
Bar 5015 reopened July 14, the day before Price filed her counterclaim against Rogers.
Price was embroiled in separate litigation last year when six nearby residents sued Turkey Leg Hut for producing what they said was “noxious” wood smoke that emanated from the restaurant’s outdoor pit area. Price and her husband, Lynn Price, cast the lawsuit as an attempt to force the Blackowned restaurant out of the gentrifying neighborhood. The plaintiffs — who are Asian, Black, Hispanic and white — refuted the claim, citing concerns about carcinogens and other alleged health hazards.
Even after the residents dropped the lawsuit, other neighbors continued to file formal complaints with the Houston Health Department over the smoke. City health inspectors also issued 28 citations to Turkey Leg Hut between August and November last year, which a department spokesman described as “out of the ordinary.”
A Turkey Leg Hut spokeswoman said the Prices were working to create an enclosure and filtration system to deal with the smoke.
In this month’s lawsuit, Rogers contends that he built his initial 15 percent interest in Turkey Leg Hut into a 29 percent stake by “using his personal funds to (buy out) other partners” at Price’s request. Price said Rogers received a portion of previous co-owners’ interests that leaves him with an 18.75 percent stake in the restaurant.
Price in her court filing accused Rogers of making financial moves for Turkey Leg Hut without her consent, citing a case in which Rogers allegedly signed Wells Fargo to process credit card payments for the restaurant. Price said the agreement left the restaurant on the hook for $40,000 in processing fees that it would not have had to pay under its existing credit card system.