Yuk Fung Ma v. J.C. Sake, Inc.

2011 WL 2175913 (2011)

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Nature of the Case

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Facts

P entered into an agreement with Gee Wai Chan (Alex) and his brother Gee On (Adam) to open a restaurant. P would be the cook and primary manager. Alex, who owned other restaurants, would come by to assist and advise. Adam was present at the opening of the restaurant but otherwise did not appear. The Chans hold an ownership interest in the building at 2087 Coney Island Avenue in which the restaurant is located. P is related to Alex's wife. P would receive compensation at the rate of $3000 a month for six days a week, plus overtime, which was represented to be the market rate for 'head cook.' P was asked to invest $100,000 but was permitted to contribute only $46,414.50 in cash for what P believed was a one-third ownership interest in the business. Alex and Adam opened a bank account and, after renovating the premises, opened the restaurant in May of 2007. P together with his wife and sister managed the business. The restaurant was not profitable for the first several months of operation. P was unable to take a salary for the first ten months, although he was able to begin to recoup the loss beginning in 2008. In June 2008, Alex visited the restaurant and found the situation not to his liking, including the presence of P's wife, child, and sister on the premises and unsanitary conditions. Alex demanded that P purchase supplies for the restaurant through a distributor owned by Alex. P refused. Alex threatened to 'kick [him] out' if he refused. P then responded 'OK,' P decided to get out and Adam calculated P's interest based on the records and receipts and offered $47,000 for his shares. P claims there were several other investors, the other defendants herein, of which P claims to have had no prior notice, whose interests were factored into the computation. P rejected the $47,000 buyout. P closed the restaurant and went home. The next day P was locked out and the restaurant was closed. Adam then reduced the offer to $35,000, because of the closing and that, if P did not take it, the restaurant would continue to be closed and P would get nothing. P denied that he had been given the alternative to purchase Ds' interest in the restaurant for $160,000. Adam's original calculations indicated a $230,000 value. When P met Adam on July 10, Adam demanded that he accept the $35,000 or face further closing and get 'nothing.' Adam paid P $38,000 for his shares. P sued Ds claiming economic duress.