Tony’s Seafood legal dispute boiling over

For decades, Tony’s Seafood has been the place where Baton Rouge residents go for crawfish, crabs, shrimp and the catfish that swim around in a tank. Crowds at the Plank Road market are so large that East Baton Rouge Parish sheriff’s deputies are frequently on hand to direct traffic in the parking lot.

But court filings show a dispute between two of the brothers that own Tony’s has gotten so toxic that a judge is being asked to dissolve the holding company that was set up to handle the profits from the seafood market and adjoining Louisiana Fish Fry Products business.

Pizzolato Investment Co. was formed in 1992 by “Big Tony” Pizzolato, who founded the seafood business in 1959. The firm was set up to hold the profits from Tony’s and Louisiana Fish Fry and other family investments.

Under the agreement, Tony Pizzolato’s six children — Bill, Joey, Mike, Cliff, Tad and Ceily — owned an equal share of the investment company.

Every month, profits from the two businesses went into the holding company and each quarter the profits were divided equally among the six children.

Cliff Pizzolato, who co-founded Louisiana Fish Fry with his father in 1983 and served as company president, filed a lawsuit in August to dissolve the holding company.

In the lawsuit, Cliff Pizzolato said his brother, Bill, has “abused his position to denigrate and bully” him and “breached his duty as an officer and director.” Bill Pizzolato, the eldest child, is president of Tony’s Seafood and manager of Pizzolato Investments.

In a court filing, John Jakuback, an attorney for Bill Pizzolato called the allegations “false and unsupported” and “ridiculous and untrue.”

Jakuback said there is no reason to dissolve the holding company because it is continuing to serve at least three of its lawful purposes: holding and investing cash, holding, investing and developing land and making distributions. He cited court cases that show dissolution is only permitted where it is not reasonable to carry on the business within the articles of organization.

“Regardless of the outcome, our hope is that we can move past these differences and come together again to continue to grow the business we have operated for over 50 years,” the Pizzolato Investment Co. said in a statement Monday. The holding company called the allegations by Cliff Pizzolato “outrageous and untrue.”

That statement was issued hours after a press release denying some media reports that Tony’s was planning a second location. “Contrary to local reports, Tony’s Seafood Market and Deli has no current plans to open a new location in Baton Rouge,” it said.

Cliff Pizzolato’s lawsuit said the issues it contains stem back to 2007, when he got into a dispute with Bill Pizzolato over requiring the children of the six owners of Pizzolato Investments to comply with mandatory drug and alcohol testing. Any children of the owners who failed drug tests or didn’t comply with counselor’s requirements would lose their jobs with Tony’s or Louisiana Fish Fry, the suit said.

Two years after the policy was implemented, Cliff Pizzolato said Bill Pizzolato “went ballistic” and violently opposed new testing.

The second incident that Cliff Pizzolato said led to the rift was in spring 2012 when, during a particular disagreement, Bill Pizzolato “humiliated and undermined” him in front of a group of his employees. Cliff Pizzolato said he left after a physical attack, but returned to work the next day. Bill Pizzolato again verbally attacked him and undermined Cliff Pizzolato in front of about 50 employees, according to the lawsuit, and Cliff Pizzolato said he left humiliated and embarrassed.

On July 10, 2012, Cliff Pizzolato got a letter from Bill Pizzolato advising him to stay away from Tony’s and Louisiana Fish Fry so tempers could cool.

In September 2012, a bloc of family members voted to remove Cliff Pizzolato from the board of directors, and authorized board members to increase their own salaries and distribute additional shares without approval from the other shareholders, the suit says. This had the effect of making Cliff Pizzolato and Tad Pizzolato minority shareholders.

Cliff Pizzolato was not terminated and his salary continued, but he wasn’t allowed to return to work at Louisiana Fish Fry.

On June 20, 2013, Cliff Pizzolato said he was notified he was no longer allowed to return to his job managing the daily operations of Louisiana Fish Fry. Bill Pizzolato also “suspended” Tad Pizzolato and barred him from the premises.

In the suit, Cliff Pizzolato charges that Bill Pizzolato used the assets from Pizzolato Investments to give gifts to family members in exchange for votes. Those gifts included interest-free loans, paying for personal expenses such as cellphone bills and auto insurance and even buying homes for the former spouses of family members. He accused Bill Pizzolato of “gross mismanagement” that produced a less than 0.008 percent return on the cash and real estate assets of Pizzolato Investments.

Cliff Pizzolato said the profits from Tony’s and Louisiana Fish Fry stopped going to Pizzolato Investments sometime between March 2012 and June 2013. He said the cash in Pizzolato Investments has been depleted by $3 million.

Cliff Pizzolato said he’s lost his share of at least $3 million, maybe up to $7 million in potential profits from Pizzolato Investments.

Last month, a special master assigned to the case found that Tracie Pizzolato, Cliff’s wife, had no grounds to ask that Pizzolato Investments be dissolved, since she was not a member of the partnership. But the special master found that Cliff Pizzolato had a cause for action to request Pizzolato Investments be dissolved.

The case has been assigned to 19th Judicial District Judge Kay Bates, who has set a telephone status conference on the case for April 2.

Pizzolato Investments said it expects the lawsuit against the company will be “dismissed in its entirety, or at least amended to correct the false and baseless claims against it.”