It is not uncommon in the restaurant business for a restauranteur to partner with a silent-partner investor, i.e. the money guy. It's not uncommon for the restaurant partners to fight over the control of the restaurant (see here, here, and here).
It is uncommon for the money guy to attempt to oust the restauranteur from the successful business he developed from the ground up, and replace him as manager. It's even less common to attempt to achieve this on a preliminary injunction motion at the very start of a lawsuit.
Throw in nearly a dozen back-to-back motions and five related lawsuits, and you have today's case, Revka LLC v Levy, et al., Index No. 655547/2023 (Supreme Court, New York County, April 21, 2025), before Justice Shahabuddeen Ally in New York County Supreme Court, the latest in a sprawling, bitter dispute between Cobi Levy, a New York City restauranteur, and Salim Assa, a real estate investor that Levy partnered with.
Little Prince Restaurant
Principessa Soho LLC ("Soho") was formed in 2013 by defendant Levy and 6 of his friends to develop, own and operate a restaurant called Little Prince, a Parisian-style bistro on Prince Street in Manhattan. In 2018, Assa approached Levy to invest in Soho as well as other Levy-owned restaurant ventures in the city, including what would become Lola Taverna (a Greek restaurant).
On September 27, 2018, Assa and Levy entered into a Purchase Agreement whereby:
- Levy would repurchase a 38% interest in Soho (for Little Prince) from one of its original investors for $250,000;
- Assa (through an affiliate) would purchase the 38% interest from Levy for $201,000 (less a $100,000 credit), to be paid in full within six months; and
- Assa and Levy would own the "net 50.16% member interest" in Soho on an 80-20 basis, respectively.
The "net 50.16% member interest" in Soho was comprised of the 38% interest acquired by Assa, combined with Levy's individual 13% interest in Soho, with the parties to roll up their respective interests into the newly-formed plaintiff Revka LLC. As reflected in the respective operating agreements, Assa was designated as Revka's Manager, and Levy would continue to serve as Soho's Manager.
The parties dispute whether Assa made full payment to Levy under the Purchase Agreement, but otherwise agree that Little Prince enjoyed success in the ensuing years.
Simmering Tensions Between the Principals Go Nuclear
To say that the parties' relationship "deteriorated" (the Court's word) post-COVID would be an understatement.
It is unclear from the record when the trouble truly started. But, in 2021, accusations between Assa and Levy flew back and forth where both sides believed they were owed substantial sums of money, both sides unilaterally withdrew money from non-party Lola Taverna's operating account, and both sides undertook efforts to freeze the other out. This kicked off a string of half a dozen lawsuits between Assa and Levy centered on Lola Taverna (4 out of the 6) and Little Prince (2 out of the 6).
Focusing here on the Little Prince lawsuits, in April 2023, Revka commenced a books and records proceeding to access Soho's financials from 2020, 2021, and 2022, along with access to Soho's online restaurant management platform. Soho did not timely appear or oppose the application, so on June 12, 2023, the Court entered an order directing the requested books and records be made imminently available.
Soon thereafter, Revka purportedly removed Levy as Manager pursuant to a written consent, dated October 16, 2023. That same day, Revka transmitted a removal letter to Levy, notifying him of the Removal Consent, setting forth the bases for his "uncured negligence and willful misconduct," including:
- Levy's refusal to make all Soho's books and records available for Revka's inspection;
- Levy's unauthorized payment of $50,000 to non-party Charles Blackburn;
- Levy's unauthorized distribution of $25,500 to himself and an affiliated entity even though they are not members of Soho; and
- Levy's failure to direct corresponding distributions to Revka.
Levy, for his part, disregarded both the Removal Consent and Removal Letter, and continued to act as Soho's Manager.
Revka Seeks a Preliminary Injunction with TRO to Remove Levy as Manager
On November 3, 2023, Revka commenced this lawsuit (action number 6), asserting claims for breach of contract, conversion, breach of fiduciary duty, unjust enrichment, breach of duty of loyalty, as well as preliminary and permanent injunction to remove Levy as Soho's Manager.
Revka concurrently sought a TRO to enjoin Levy from making any payments or disbursements from the company's bank accounts without Revka's written approval.
In response to the preliminary injunction motion, Levy did not deny that he continued acting as Soho's Manager, contending that it was best for the business and for the owners, several of whom submitted affidavits in support of Levy. Levy further argued that Revka (through Assa) already had complete, unfettered access to the Soho's books and records since 2021. Levy claimed the $50,000 payment made to Blackburn was to repay borrowed funds covering the shortfall between what the Levy paid for the 38% interest and what he received from Assa for that interest.
But Levy's coup de grace was that Revka did not, and does not, have the authority to remove him as Manager, nor was it entitled to distributions, because Revka is not a member of Soho for failure to pay the purchase price in full. In other words, Assa could not transfer a 38% interest to Revka that he never acquired from Levy.
In response, Revka conceded that the full purchase price was never made directly to Levy, but argued that the parties supposedly agreed to satisfy the debt indirectly through a capital contribution of $116,000 to Lola Taverna. Revka also argued that the parties acted as though Revka was a 51% member throughout that interim period, thus constituting a waiver of any such defense challenging Revka's membership.
Justice Ally Denies Revka's Preliminary Injunction Motion, But Does Not Hand Either Side a Clear Victory
On April 22, 2025, Justice Ally vacated the TRO and denied Revka's preliminary injunction motion.
Likelihood of Success on the Merits: Is Revka a 51% Member of Soho? Maybe, Maybe Not.
Justice Ally did not find persuasive that Assa indirectly satisfied his purchase obligation. Other than Assa's self-serving affidavit, Revka did not offer much in the way of support of the theory that the capital contribution to Lola Taverna (an entirely separate and distinct restaurant venture) indirectly satisfied the obligation to Levy for the purchase of the Soho membership interest.
But, the Court held that Revka might succeed on the ownership question based on waiver. It was undisputed that Levy should have been paid in full under the Purchase Agreement by no later than March 27, 2019. But the first time he asserted his rescission defense was over 4 years later, in answering the complaint in this action. During the intervening period, the parties acted as though Revka was a 51% member, including listing it as such in the company's tax returns, consulting with Revka (Assa) on business decisions, and permitting access to Soho's books and records.
Likelihood of Success on the Merits: Did Levy, as Manager, Breach His Duties? Maybe, Maybe Not.
The Court found Revka unlikely to demonstrate that its removal of Levy was properly based on denied access to Soho's books and records. Assa was offered "essentially unfettered" access since April 2021. Justice Ally further noted that this was the same reason the Court denied Revka's contempt motion the related books and records proceeding.
However, the Court did find a likelihood of success concerning unpaid distributions, and the $50,000 payment to Blackburn, as Levy did not offer justification for why Soho's funds were used to pay for a personal expenditure.
Irreparable Harm: Revka's Claims Are for Money Damages, Only.
That said, the Court entirely rejected Revka's argument that "irreparable harm exists per se in every case in which the party to be enjoined is operating in a managerial role." Justice Ally noted that the claims Revka may prevail on do not lead to irreparable harm, but can be resolved with money damages.
There were no allegations that Levy mismanaged Little Prince, or that his management would lead to the company's failure. Rather, the evidence appeared to suggest the very opposite: "Levy is a major reason for any success that the restaurant might be enjoying."
Balance of Equities: Levy as Manager Preserves the Status Quo.
The Court also found that the balance of equities tipped in Levy's favor, favoring denial of the injunction. The Court credited Levy's affidavit(s) and the affidavits of the other members of Soho voicing their support for Levy, finding:
If Levy is replaced as Manager by Revka, the individual who founded, planned, designed, and managed Little Prince successfully from inception, and who has decades of experience successfully managing other restaurants in New York City, would be replaced with an entity controlled by an individual with no relevant experience and no successful track record of managing restaurants who does not dispute either that lack of experience or that he has not even set foot in Little Prince in years. In other words, Little Prince would lose what appears to be its driving force in exchange for an inexperienced and apparently disinterested investor—an investor, furthermore, that no other Member of Soho would care to see in the position of Manager.
Noting the high bar for a mandatory injunction, the Court found that no extraordinary circumstances justified the imposition of a mandatory injunction replacing Levy with Revka.
Closing Thoughts
With the benefit of hindsight, it's clear that Revka lost this motion because it was an overreach (see Frank McRoberts' post from December 2023 outlining the bases for a successful injunction motion between closely held business owners).
The Court essentially acknowledged as much in a footnote at the end of the decision:
The Court notes that, under the facts of this case as currently presented, the parameters of the TRO currently in place strike the Court as proper parameters for any preliminary injunction. But Revka did not request that the TRO be converted to a preliminary injunction, and the Court is not in the business of providing unrequested extraordinary relief.
The TRO in question, as modified before it was vacated, provided: "Defendant Levy is enjoined and restrained from making, or causing to be made, any payments or disbursements from the Company's bank accounts, other than ordinary business transactions for the operation of the business with proof of payments to be provided to plaintiff within thirty (30) days of payment, without Revka's written approval."
Revka might have had success with a more reasonable ask, in line with the relief sought in the now-vacated TRO.
But, frankly, "reasonable" doesn't seem to be in either side's vocabulary. In the 18 short months since the preliminary injunction motion was filed, Justice Ally fielded six additional motions, including: Soho's aforementioned motion to vacate or modify the TRO (Mot #002); a motion to seal (Mot #003); Revka's contempt motion (Mot #004); Soho's motion to disqualify Revka's counsel (Mot #005); Revka's motion to dismiss counterclaims and a third-party complaint (Mot #006); and a Levy-side motion for leave to amend, intervene, and amend the caption (Mot #007).
And yes, several of these motions (and their oppositions) are as petty as they sound.
The parties engaged in equally excessive and contentious motion practice in the overlapping books and records proceeding (also before Justice Ally), where, following the Court's initial order directing that books and records be produced: Revka moved for an order of contempt against Soho for failure to grant complete access to its books and records; Soho appeared (finally) in order to vacate the default order; Soho moved for sanctions based on harassment because they contended that Revka (through Assa) had access to all of the books and records sought since 2021; and Revka cross-moved to strike Soho's sanctions motion.
In a herculean undertaking, Justice Ally rendered decisions on all ten of these motions during that 18-month period, now clearing the path for the parties to move forward with discovery. But, based on the trigger-fingered vigor with which the parties have litigated their dispute thus far, I can't imagine discovery going any smoother.
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