NEW ORLEANS — A family struggle for control of one of New Orleans’ best-known restaurants is in the hands of a federal judge.
U.S. District Judge Susie Morgan didn’t immediately rule Tuesday after hearing arguments from attorneys for two competing factions of relatives of Brennan’s restaurant’s late founder, Owen Edward Brennan.
One of Brennan’s sons, Ted, and Ted’s daughter Bridget Brennan Tyrrell, sued Ted’s brother, Owen “Pip” Brennan, after he called a shareholder meeting April 26 to vote on removing them as directors of Brennan’s.
Ted and his daughter claim they have been solely in control of Brennan’s since December 2010, when Pip sold his shares as part of a settlement resolving state court litigation between them.
“Pip Brennan has no right to take control of Brennan’s restaurant,” said Phil Wittmann, a lawyer for Ted and his daughter.
Pip, however, claims he is entitled to maintain his voting authority because he hasn’t been fully compensated for the stock sale. Vic Welsh, one of Pip’s attorneys, said Ted and his daughter can’t sue to enforce the settlement while in breach of its terms.
“And it is undisputed they are in breach,” Welsh told Morgan, who heard several hours of testimony Monday by Pip Brennan and Tyrrell.
Ted and his daughter are seeking a court order barring Pip and two sons, Blake and Clark, from entering the French Quarter restaurant or taking any action under the guise of being a shareholder, director or officer of Brennan’s.
Blake and Clark started managing Brennan’s in 1995 and were making plans to expand when Hurricane Katrina struck in 2005, leaving the building heavily damaged.
In a court filing, lawyers for Ted and his daughter claim Blake and Clark abandoned their positions “without notice” in March 2006 while the restaurant was being repaired. The brothers’ lawyers, in turn, say Ted had informed them just before Katrina that they would never be anything but employees of the restaurant and should leave if they weren’t satisfied.
Brennan’s is famous for inventing the Bananas Foster dessert in 1951 and has been a prominent fixture of the city’s vaunted culinary scene for decades.
Ted and Pip’s father died in 1955 at age 45. In the 1960s, the family opened restaurants in Houston and Dallas and purchased Commander’s Palace, another upscale New Orleans restaurant.
The expansion, however, led to a decline in the original restaurant’s quality and fueled a schism between some family members.
The tensions boiled over following the shareholder meeting that Pip called last month. After the meeting adjourned, Pip and his sons allegedly entered the closed restaurant without permission and tried to call a staff meeting, prompting Bridget to call the police. The confrontation ended with an agreement to let Ted’s son, Teddy, and Pip’s son, Blake, temporarily co-manage the restaurant until Morgan could hear the case.
Ted and his daughter argue Pip didn’t have the authority to call the shareholder meeting. Their attorney said Pip’s stock sale was completed in December 2010.
“He’s not entitled to vote his stock,” Wittmann said.
Welsh rejected that claim and argued that Ted and his daughter’s terms as officers and directors had expired by January 2012, leaving Brennan’s without any at the time of last month’s shareholder meeting.
“Those positions have got to be elected,” he said.
The lawsuit isn’t the only legal headache dogging the debt-saddled restaurant. The pink building it occupies near Bourbon Street is scheduled to be sold May 23 at a sheriff’s auction.
Copyright © 2011, Capital City Press LLC • 7290 Bluebonnet Blvd., Baton Rouge, LA 70810 • All Rights Reserved