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Labor lawsuit forces Fort Collins bar to sever partnership ties

Growing companies often form strategic partnerships to reach business goals and become successful. Unless those partnerships are managed very closely, things can quickly go wrong as one local business is now discovering.

In mid-May, a chef who owns other successful out-of-state restaurants opened a new bar in the Old Town district of Fort Collins called The Lodge Sasquatch Kitchen. With a late-night menu and game loft, this bar was destined for success. It was opened under the LTB Concepts umbrella, a firm that owns several restaurants and offers restaurant consulting services, such as business purchase agreement and marketing strategies.

LTB Concepts also was reported as owning another Fort Collins restaurant, Taverna Greek Grill, which closed its doors in December 2013. This made The Lodge's owner appear to also be an owner of Taverna under the LTB Concepts conglomerate.

The Lodge's chef owner clarified the ownership structure in an email on May 21 stating that some of the restaurants listed as LTB restaurants were owned by him and other undisclosed partners, while others, including Taverna, were solely owned by another businessman and his partners.

This declaration came on the heels of a Department of Labor lawsuit against Taverna, which was filed in February. The lawsuit alleged that the restaurant violated Fair Labor Standards with regards to more than 70 of the restaurant's employees.

The owner of Taverna helped to secure a lease for The Lodge, but when the restaurant's owner heard of the allegations against Taverna's owners, he severed all ties and is currently in the midst of dissolving current partnerships that relate to the restaurant.

When businesses form strategic partnerships, it is critical that they rely on their legal and financial advisers for advice, but they must also be sure to understand what is going on with any related businesses. While The Lodge's reputation may not be tarnished by this lawsuit, it could have easily gone the other way.

Source: The Coloradoan, "New bar open; owner severs ties with Taverna owners" Josie Sexton, May. 21, 2014

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