EXCLUSIVE: The Profit's Marcus Lemonis is accused by 70 family businesses of being a 'wolf in sheep's clothing' and 'destroying' their companies after appearing on his show - with one owner 'driven to suicide'
At least 70 family businesses claim millionaire Marcus Lemonis ruined or harmed them by appearing on his reality TV show The Profit, according to new legal paperwork obtained .
They represent nearly three-quarters of the small firms featured in the seven seasons of the CNBC hit, which is designed to help or rescue firms that are in trouble.
The show, which premiered in 2013, follows the business guru on his hunt for struggling small businesses, which he then offers to save by typically presenting them with his financial backing and acumen in exchange for an ownership stake.
If the owners agree to the deal, Lemonis assumes full control of the company and uses his expertise to improve operations and make the business profitable.
However, lawyers for one company suing the tycoon in New York now allege 70 small firms were 'depicted falsely in an unforgivable manner' and claim they were 'destroyed through the forced and fraudulent indebtedness and crafty theft of the trusted advisor host, Marcus Lemonis.'
At least 70 family businesses claim millionaire Marcus Lemonis ruined or harmed them by appearing on his reality TV show The Profit, DailyMail.com can reveal
Of those, 51 have contacted NBC about their 'nightmare' experience, says an amended complaint in the case being brought by upscale women's clothing store Gooberry – which alleges Lemonis, 47, drowns featured companies in debt and makes them ripe for his takeover.
Dailymail.com reached out to Lemonis’s lawyers for a comment, but they did not respond.
Gooberry's legal team said they conducted an eight-month investigation, 'now involving a former district attorney and a top law school professor, and a world- renowned psychiatrist' before filing the revised complaint to a Southern District of New York judge.
And they allege one business owner was 'driven to suicide' after a show that recapped some earlier episodes.
Their filing states: 'The show that has run for seasons on national television and streamed internationally by NBC and CNBC is not only false in its premise and in the story told to viewers, but it is the vehicle through which black-owned businesses started out of poor neighborhoods, and Latino-owned businesses started through generations, and women-owned businesses and LGBT businesses were seduced on to a TV show where false promises were made in writing…'
The lawyers allege 'detailed financial information given in trust' was used to 'embarrass, manipulate and psychologically fully destroy, cripple or set back as many as 70 companies' and at least 51 'have presented their hellish nightmare' to NBC and its owner Comcast.
They claim: 'Those companies don't exist today for the most part, as is the case with Plaintiff Gooberry and so many others, and Marcus Lemonis is left holding the assets and the most important ones, after stealing and leveraging away inventory, key employees, money, intellectual property, trade secrets, and more – and the soul of each of these people.
'One victim on the show later killed themselves in large part on account of the ugly and false way the family was portrayed. Several have contemplated it, and they have formed a victims' network to try to support each other through a process of depression, humiliation, embarrassment, and anger.'
The lawyers do not name any of the 70 companies in the filing, nor the alleged suicide victim.
They claim a 'former key NBC executive who ran the show' told the head of Gooberry at Lemonis's 2018 wedding to clothing entrepreneur Roberta 'Bobbi' Raffel, 68, that the 'fraud would get out'. They do not name the executive.
'This case seeks careful and firm justice, and no matter how many big firm lawyers come at these already destroyed and humiliated and defamed victims and the clients in this case, justice is the only thing these poor small businesses and in many cases minority owners have left to seek,' they write.
The latest development comes two weeks after a judge in a similar lawsuit dismissed claims of fraud and civil RICO racketeering against Lemonis. It was filed by now-defunct Manhattan-based company Bowery Kitchen Supplies. Other claims over unlawfully using Bowery's trademark are ongoing.
According to documents obtained by DailyMail.com, lawyers for a company suing Lemonis, Gooberry, claim the firms were 'depicted falsely in an unforgivable manner', with one business owner being driven to suicide
DailyMail.com revealed in May that the TV host had been hit by the two lawsuits, both of which alleged he drowned the companies in debt so he could take them over following their appearances on his show.
The cases are handled by LA law firm Gerard Fox. Their latest filing for Gooberry repeats their earlier allegation that the TV host is a 'wolf in sheep's clothing, and a false prophet who uses his fame and fortune to steal small businesses from everyday Americans'.
It also alleges: 'Through NBC's television show, The Profit, Lemonis presents himself as a savior of struggling small business owners, all the while preying on the business he purports to be saving.
'Lemonis strategically and deliberately drowns these businesses in debt to him and his entities in order to foreclose on them and take their assets and intellectual property to expand his own empire.'
The businessman, 47, has enjoyed a meteoric business and TV career after being mentored by legendary Chrysler boss Lee Iacocca, a friend of his adoptive family in Miami.
Lemonis, 47, was born in Beirut, Lebanon where he was adopted by a Greek-Lebanese couple from Florida after being abandoned at four days old.
He worked his way up through his family's Chevrolet car showrooms before buying up RV dealerships on Iacocca's suggestion. He is now CEO of Camping World, which had a $2billion valuation when it launched on the stock market in 2016. He is reported to be personally worth $500million.
Gooberry's lawyers allege Lemonis took control of a thriving clothing retailer and its signature line Courage b while trying to oust its founding family members.
The company started in 2008 as an upscale women's fashion chain operated by Neomi Goureau and her children, Nicolas Goureau and Stephanie Menkin.
It focused on clothes and accessories inspired by the family's French roots and had seven stores from The Hamptons, New York, to Palm Beach, Florida.
Since appearing on the show in 2014, Gooberry owners Nicholas Goureau and Stephanie Menken (pictured) say their business has gone from a $2.6million valuation 'to being practically insolvent,' the lawsuit states
Since Lemonis's involvement in June 2014, Gooberry has gone from a $2.6million valuation 'to being practically insolvent,' the lawsuit states
During their 2014 appearance on The Profit, Lemonis agreed to invest $800,000 for a 30 per cent stake in the company. Some $200,000 of that was for renovations.
But while the show was filming, the star allegedly spent 'millions' renovating the stores and claimed he would cover the costs, legal papers state.
When Nicholas and Stephanie received the 'exorbitant' renovation bills, the lawsuit alleges: 'Lemonis said that if they no longer wanted to do the deal, they would have to pay him back the millions he spent on Gooberry – a demand that was impossible for the plaintiffs to meet.'
Court papers further allege the star and his companies, ML Retail LLC and Marcus Lemonis LLC, 'knowingly and purposefully mismanaged the company and used it solely for their own personal gain.
'Defendants are siphoning money from the company, actively preventing it from meeting its obligations and looting its assets.'
Lemonis is also accused of forcing through Gooberry's purchase of fashion store, Runway Boutique in 2016 after meeting owner Bobbi Raffel, who became his second wife.
'On information and belief, Lemonis wanted Gooberry to acquire Runway because Lemonis was romantically interested in its owner Raffel, not because he believed the acquisition would help Gooberry or ML Fashion, which was formed shortly after the acquisition.'
The court filing claims Gooberry and ML Fashion paid to completely renovate the Runway store in Deerfield, Illinois, and stock it with new inventory.
It adds: 'Once again, these expenditures forced the companies to take on additional debt from Lemonis to meet its basic expenses.'
It is alleged the TV tycoon has ultimately used Gooberry, its brand Courage b, and the family's expertise to grow his new clothing brand MARCUS.
The company claims Lemonis has closed its retail stores and moved its stock plus furniture and fixtures to his own businesses.
Since Lemonis's involvement in June 2014, Gooberry has gone from a $2.6million valuation 'to being practically insolvent,' the lawsuit states.
'Without Lemonis' involvement, Gooberry would have continued to thrive and likely would be worth several million dollars.'
'It is clear that he is planning on foreclosing Gooberry and even further removing plaintiffs from the fashion and retail business they worked so hard to build.
'Without the court's intervention, the company will be irreparably harmed.'
The family is demanding Gooberry is wound up and with a trustee appointed. Their filing says: 'Liquidation is the only feasible means whereby plaintiffs may obtain a fair return of their investment.'
Lemonis's attorneys have hit back in court papers, saying Goureau and Menkin are still the majority equity owners of the company and control the majority of seats on its board of directors.
'Yet, unlike Lemonis, Plaintiffs never put any money into Gooberry of their other business ventures with Lemonis – they only took money out,' they add.
Goureau and Menkin are suing Lemonis, ML Retail LLC, Marcus Lemonis LLC, Roberta Raffel, LLG Retail LLC, television production company Machete and NBCUniversal Media LLC. They are demanding a jury trial and punitive damages.
NBC was named as a defendant in the latest filing, but not in previous court papers. It is up the judge to decide if it becomes one.
The company said: 'NBCUniversal is not a party to this years-old case. We're aware that the plaintiffs have asked the court to let them file a new complaint that makes allegations against NBCUniversal. Those allegations are without merit.'
According to court documents obtained by DailyMail.com, Bowery Kitchen Supplies was successful and turning over upwards of $3million a year when Lemonis 'seduced' owner Howard Nourieli and his business partner and ex-wife Robyn Coval to appear on the sho
In a separate lawsuit being handled by the same law firm, Gerard Fox attorneys allege Lemonis used the same methods to grab control of thriving clothing retailer Gooberry and its signature line Courage.B. Pictured: A now-defunct Courage.b store in New York City
In the other case - brought by Bowery Kitchens owner Howard Nourieli - New York Judge J. Paul Oetken earlier this month dismissed all the fraud and civil RICO allegations.
The owner had claimed his company was turning over $3million a year when they appeared on The Profit in 2014.
In the episode, Lemonis was seen offering to invest in Bowery Kitchen by acquiring a 33.3 per cent interest in the business for $350,000.
But according the lawsuit, he later abandoned the aired deal and instead of helping the store profit, forced it into 'unrecoverable debt'. The company shut in 2020.
But Judge Oetken said claims that Lemonis 'acted with the sole purpose of harming the plaintiff or used dishonest, unfair, or improper means' failed.
He added that Lemonis telling Nourieli he would be equal business partners and to 'trust the process' were 'hazy aspirational statements' and 'not fraud'.
The judge dismissed all claims against TV production company Machete. He also ruled 'all claims against the other defendants are dismissed' - except for allegations of trademark infringement, 'deceptive business practices, unjust enrichment' and a ruling on the business relationship between Lemonis and Nourieli.
He gave Lemonis and the remaining defendants – Marcus Lemonis LLC and Camping World – 21 days to file answers to the surviving claims.
No comments