The nasty feud between the owners of Montauk’s Sloppy Tuna worsened this summer, even as revenues for the bar and restaurant slid. One partner—Drew Doscher—is pitted against three former Wall Street colleagues: Michael Meyer, Stephen Smith, and Michael Meagher of Seaport Global Securities. At issue are the title to the Montauk property, the occupancy rights and ownership of the Sloppy Tuna trademark and logo.
So far, at least 11 lawsuits have been filed in state and federal courts totaling 100,000 pages and growing. Doscher, in an email to Yahoo Finance, stated that he was subject to wrongful termination at Seaport Global and that falling out led to his former colleagues "attacking" the Tuna. "That was my baby and something I loved and they thought it would deplete me of money to prosecute them to the fullest. Which has only made me turn up the heat." (The others say he quit Seaport Global.)
As a result from the court battle, the judge in the case decreed that the bar/restaurant be run by a court-appointed receiver. The Tuna opened for the year under new management on May 13.
The financial reporting package submitted to Suffolk County Court at the end of August show that revenues were down 22% ($500,226) for the first seven months of 2016 compared to 2015. In the same period, the company reported a net loss of $413,041 in 2016, versus net income of $692,021 in 2015. The loss is blamed on litigation costs of $404,244, increased SG&A (selling, general and administrative) expenses of $404,244, as well as the revenue decrease.
The company blamed the losses on "the continued efforts to comply with the Town of East Hampton’s occupancy codes and ordinances for noise decibels forcing the Company to operate at much lower occupancy levels and thereby turn away customers to comply with the codes." Unlike in past summers, the Sloppy Tuna did not have a single violation from East Hampton this summer. Also, the bar closed at 2AM, as opposed to 4AM or 5AM in previous years, and efforts were made to curb large crowds.
The Tuna also blamed the Town of East Hampton’s rental registry law for lower revenues. "In addition, the Town's enforcement of the new rental registry effective May 1, 2016 limits the local homeowners' ability to rent to weekly tenants and has adversely affected all local businesses in Montauk and surrounding areas. Overall local business are experiencing a decrease of 20% or more as compared to last year because of a stricter, more enforced town code and lower patronage in general."
We’ll keep on eye on this saga, for sure.
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