Four-Star Food Fight: LeRoy vs. Bouley

The well-known restaurateur on the other end of the phone line was searching for the proper word to characterize the deteriorated state of relations between Russian Tea Room owner Warner LeRoy and his former partner, four-star chef David Bouley.

“There’s, like, hate ,” said the restaurateur, who asked to remain anonymous before deciding to put the culinary contretemps in the context of recent political events. “Warner’s like India. He’s going to test the hydrogen bomb.”

On June 11, Mr. LeRoy launched his attack, but it was hardly of the nuclear variety. He filed suit against Mr. Bouley in State Supreme Court in Manhattan. The gist of the suit is that Mr. Bouley violated the terms of his contract with Mr. LeRoy over Bouley Bakery, the first venture in what was to have been an ambitious partnership between the two strong-willed food moguls. The filed papers contend, among other things, that Mr. Bouley misappropriated funds from Bouley Bakery, improperly competed with the bakery via another business in which Mr. LeRoy has no stake, and failed to equally distribute the proceeds of the bakery between himself and Mr. LeRoy.

Eleven days later, on June 22, Mr. Bouley’s attorney, Andrew Rahl, told The Transom that his client and Mr. LeRoy had a “handshake” agreement to settle the lawsuit out of court. (The parties are expected in court on June 29.) Still, Mr. Rahl called Mr. LeRoy’s lawsuit “nonsense” and said it was a “given” that Mr. Bouley and Mr. LeRoy were going their separate ways.

New York’s culinary establishment was hardly surprised by the news. An inevitable and ugly falling-out between the two men has been predicted ever since they announced their intentions to join forces in late 1995. Mr. Bouley represents the culinary pinnacle in Manhattan; Mr. LeRoy, with restaurants like the Russian Tea Room and Tavern on the Green, is the expert showman. In the last three years, he has had to deflect a lot of derision as his friends and colleagues told him, and anyone else who would listen, that he would not be able to rein in the clearly talented and charming but incredibly independent-minded Mr. Bouley. Mr. LeRoy has also sat quietly while Mr. Bouley made cavalier remarks about him, including to The New York Times .

Throughout it all, Mr. LeRoy publicly took the high road, even though as far back as last September there were whispers that he was looking for someone besides Mr. Bouley to oversee the cuisine at the Tea Room. Bouley camp sources confirmed that for several months, the two men were attempting quietly to end their relationship when Mr. LeRoy sprang the lawsuit on his soon-to-be-ex-partner. (Regarding that speculation, Mr. Rahl said that he had no comment.)

Then, to make matters worse, all of the skeptics turned out to be right.

Neither Mr. LeRoy nor his attorneys would comment for this article, but one restaurateur friend of Mr. LeRoy said, “I think Warner is embarrassed. I think he’s embarrassed and at this point he’s beyond pissed.” There is some consensus within foodie circles that Mr. LeRoy’s lawsuit was a last-ditch move to save some face. Mr. Rahl said it is his impression that Mr. LeRoy’s side leaked the legal action to the press. (The New York Post reported on the suit in a business blurb on June 16.)

Had Mr. Bouley’s and Mr. LeRoy’s alliance borne fruit, it would have added at least two new restaurants (in addition to Bouley Bakery) to the culinary scene: Danube, which would feature Austrian cuisine, and International Cafe. Mr. Bouley was slated to be the executive chef of Mr. LeRoy’s reincarnation of the Russian Tea Room. Also planned were a cooking school and a research institute that would enable Mr. Bouley and other chefs to noodle around with organic foods and other frontiers of the gas range.

In light of their impending divorce, the two men are said each to be pursuing separate visions. In April 1997, Mr. LeRoy made an unsuccessful attempt to raise $45 million (via the investment banking company Ladenburg Thalmann & Company) to finance the refurbishing of the Tea Room and the construction of a Greek-and-Roman-themed Las Vegas restaurant called Empire! Since then, said sources familiar with the situation, Mr. LeRoy has raised enough to begin construction on the Tea Room, which has been shuttered since January 1996. The name of New Jersey-based real estate developer Steven Roth, the chairman of Vornado Realty Trust, has surfaced as a potential angel for Mr. LeRoy, but a spokesman for Mr. Roth declined to comment.

Mr. Bouley was traveling and could not be reached for comment, but he has reportedly sought backing at the investment banking firm of First Boston. It remains to be seen whether Mr. Bouley will have to scale down his vision of a TriBeCa complex of restaurants and a culinary institute. For while Mr. LeRoy’s current lawsuit focuses on the contract he had with Mr. Bouley at the bakery, sources familiar with the situation said that the larger issue is Mr. LeRoy’s reported $4 million investment in Mr. Bouley’s $16 million vision. Those sources said that Mr. LeRoy wants his money back, plus the interest.

As the partners’ relationship has withered, their peers have flourished. The surging Dow Jones has given many of the city’s dwellers plenty of extra money for upscale meals. Jean-Georges Vongerichten and his partners Phil Suarez and Bob Giraldi opened the four-star Jean-Georges last year and are about to open a restaurant in the Mercer hotel. Daniel Boulud opened Payard with his pastry chef François Payard last year and in the next seven months plans to move his restaurant Daniel to the East 65th Street space formerly occupied by Le Cirque. The site currently occupied by Daniel, in the Surrey Hotel, will then become Cafe Boulud. The two men have to be wondering whether the city’s economic boom will hold out long enough for them to put themselves back on the market.

Those in Mr. Bouley’s camp contend that the chef’s grand plan is still on track, albeit a very slow one. Mr. Bouley had initially said that Danube was going to open last December. Now, it looks like another Bouley project, Bouley at Home–a store that will feature organic meats, fruits and vegetables, cooking utensils and other gadgets for the home gourmands in TriBeCa–will be the first to open, sometime this summer.

Judging from the lawsuit, that store was a particular source of agitation to Mr. LeRoy. His suit alleges that Bouley at Home is “in violation of the terms” of the two partners’ agreement, and seeks a “preliminary and permanent injunction” to stop Mr. Bouley from “operating ‘Bouley at Home’ or any similar entity.”

The court papers also complain that Mr. Bouley used the premises of Bouley Bakery last October to cater a large dinner that is referred to rather mysteriously as “the Rockefeller Dinner.” Mr. LeRoy’s complaint alleges that Mr. Bouley “failed to account for use of the Bakery to cater the Rockefeller Dinner in its books and records, did not credit the proceeds of the dinner to the appropriate Bakery account and yet paid all of the expenses of the dinner from the Bakery’s funds.”

Mr. LeRoy contends that Bouley Bakery is “presently generating sales at the rate of $7 million per annum,” a rate that Mr. Rahl disputes; he said it would mean the restaurant is averaging nearly $20,000 in sales a day. A copy of Mr. Bouley’s and Mr. LeRoy’s operating agreement shows that the former is the 51 percent owner of the bakery but that he is supposed to distribute equally its proceeds between himself and Mr. LeRoy. Mr. LeRoy contributed $545,000 of his own money in the form of a loan to start the bakery, while Mr. Bouley initially put in $457,301. By the end of the 1997, according to court papers, his contribution had increased to $494,119. But then at the end of March, records show that the amount of Mr. Bouley’s loan to the company had decreased to $469,410. This seems to be part of what Mr. LeRoy is talking about when he alleges that “Bouley appears to have used Bakery funds to (a) repay himself a portion of his loan to the Company and (b) pay expenses for Danube L.L.C. in violation of the Agreement.”

Given the less-than-earthshaking nature of some of Mr. LeRoy’s allegations, it was not surprising when one person in Mr. Bouley’s camp said that Mr. LeRoy was behaving like “a jilted lover.” He’s not the first. In 1985, after, Mr. Bouley and an up-and-coming restaurateur named Drew Nieporent found success and three stars from then Times restaurant critic Bryan Miller with their TriBeCa restaurant Montrachet, the two had a bitter falling-out. Reportedly, Mr. Bouley was seeking financing to go out on his own while still working for Mr. Nieporent. Back then, according to the Aug. 17, 1997, cover story on Mr. Bouley in The New York Times Magazine , Mr. Nieporent loaded his ex-chef’s cooking gear into a van.

About a month ago, foodies had that feeling of déjà vu , when New York magazine reported that, fresh from his split with Mr. LeRoy, Mr. Bouley was seen driving the streets of TriBeCa with a van loaded with his possessions. (Mr. LeRoy had reportedly given the chef orders to remove his stuff from his storage space.)

Nor is Mr. LeRoy the first backer to sue Mr. Bouley. In May 1997, Herbert Wishengrad and Robert Wilson, the backers of Bouley, also sued him. Although Bouley had closed in June 1996, the plaintiffs alleged that its chef had been “improperly converting and wasting the property” of their company, Bouley Inc., “for use in restaurant ventures not involving Bouley Inc., but for his gain.”

Mr. Wishengrad told The Transom that he withdrew the suit after “my emotions settled down.” He added, “I said, wait a minute, this is David’s decision. I have no quarrel with that. He built the business.” Mr. Wishengrad said that he got his $815,000 investment back “several times over.”

“Right now, the lawsuit has him totally engulfed,” said Mr. Wishengrad, who explained that he still occasionally talks to Mr. Bouley. “He’s hurt, frankly, because he thought he and Warner had a relationship. He was surprised. He thought they were close to resolving this.”

For all of Mr. Bouley’s supposed pain, he did not behave like a man who needed any help when he was profiled for The Times Magazine . Even though the piece, by David Blum, appeared nearly a year ago, it continues to be cited by the food establishment as a prime example of Mr. Bouley’s hubris and inflated self-esteem. (Mr. Bouley apparently hated the cover photo, which feature a sideways close-up of his sweaty face while talking on a cellular.) Asked what he would do if he were put in charge of Mr. LeRoy’s tourist magnet, Tavern on the Green, Mr. Bouley replied: “Get a bulldozer.” Then a few paragraphs later, he was quoted saying: “I don’t need Warner LeRoy to do what I’m doing. And he knows that. When I say that to you, I’m not being disrespectful to Warner LeRoy.” Said one person familiar with the situation: “I don’t think Warner was ever quite aware of just how low Bouley’s regard was for him.”

It is interesting to note that in the 10 months since the Times piece appeared, Mr. LeRoy is not the only person to have parted company with Mr. Bouley. Chef Kurt Guthenbruner, who had worked as Mr. Bouley’s sous chef for five years, and who was scheduled to be the executive chef of Danube, is now the chef at Monkey Bar. Some contend that Mr. Guthenbruner and Mr. Bouley did not part happily. Mr. Guthenbruner denied this, saying only, “I got a better offer.” His former co-director of operations, Peter Kend, has returned to his previous career as a currency derivatives trader. He called “untrue” reports that one of the incidents that precipitated his leaving was that Mr. Bouley asked him to fire his own wife, Kate Kend, who was also working for the chef. The loyalty of Mr. Bouley’s former associates doesn’t surprise at least one food-industry observer of the situation. “People don’t want to lose their tables,” he said.

Four-Star Food Fight: LeRoy vs. Bouley