The husband-and-wife team behind New York’s hippest pizza chain have been accused of slicing investors out of lucrative plans to expand.
Matthew and Emily Hyland just opened their latest hot spot, Emily West Village, after launching Emily in Clinton Hill and Emmy Squared in Williamsburg.
But five investors, collectively called Garlic Knots 364 Inc., allege in New York Supreme Court papers that the Hylands hid profits from them, squandered their cash and went behind their backs to expand to Manhattan and beyond.
The spicy suit filed in April alleges the pie-making pair double-crossed their Emmy Squared investors by creating a separate holding company, then expanding under a different name. The suit also alleges the Hylands engaged in “instances of corporate mismanagement,” such as paying themselves “unauthorized management fees” and “subsidizing . . . personal trips and vacations.”
The investors’ attorney, Lee N. Jacobs, told us, “Due to the success of Emmy Squared, [the Hylands] were presented with an opportunity to expand the brand. Rather than presenting this offer to investors as they were required to do, [they] kept this opportunity for themselves . . . Instead they opened a new location of Emily, which was originally scheduled to be a new location of Emmy Squared. This lawsuit seeks to protect our clients’ rights as investors.”
The Hylands fired back through a rep: “[They] approached the current investors of Emmy Squared with a plan to expand . . . Despite their best efforts, they were not able to agree on the terms . . .As a result, the Hylands chose to instead expand Emily restaurant — a brand and concept that is separately owned by the Hylands and pre-dated the opening of Emmy Squared by two years.”
The statement adds, “The Hylands deny the allegations that have been made against them . . . Not only are the management fees and related expenses permitted by the shareholders agreement, but instead money is actually owed to them . . . The Hylands will absolutely and vigorously defend themselves.”