IN THE CIRCUIT COURT OF COOK COUNTY, ILLINOIS COUNTY DEPARTMENT, LAW DIVISION Philip Tadros, Plaintiff, v. Crain Communications, Ine., Peter Frost, Michael ‘Amdt, David Snyder, Keith Crain, Rance Crain, KC Crain, Christopher Crain, and Does 1-10, Defendants. c /AINT Plaintiff, Philip Tadros, (“Mr. Tadros” or “Plaintiff’) alleges: [MARY OF THE CASE 1. Plaintiff, Philip Tadros, is a private entrepreneur who has founded, among other things, Bow & Truss, LLC d/b/a Bow Truss Coffee Roasters (“Bow Truss”), Doejo, LLC (‘Doejo”), Aquanaut Beer Company, LLC (“Aquanaut”), Budlong, LLC (“Budlong”), and Funded Foods, LLC (“Funded Foods”). 2. Mr. Tadros is the victim of a “hit piece” published by Defendants Crain Communications, Inc. (“Crain’s”), Peter Frost (“Frost”), Michael Amdt (“Amdt”), and David Snyder (“Snyder”) concerning Mr. Tadros and his businesses. 3. Defendants published the defamatory article, entitled “One of Chicago’s most connected entrepreneurs has made more than a few enemies” (“the Defamatory Article”), in (000819911),Crain’s Chicago Business, a weekly business publication with a print circulation of more than 50,000 and more than 2.2 million digital page views per month, 4. Defendants published the Defamatory Article with the most salacious information they could find in an attempt to portray Mr. Tadros as negatively as possible, and Defendants marketed the Defamatory Article as a “special report” to attract readers and viewers of Defendants’ publications and websites. 5. The Defamatory Article relied primarily on woefully incomplete company records and false and misleading information provided by a business associate, Alan Matthew (“Mr. Matthew”). 6. The Defamatory Article further misrepresented statements from other business associates and inaccurately described Mr. Tadros” business practices. 7. Inauthoring the Defamatory Article, Defendants intentionally failed to investigate or publish anyone or anything positive about Mr. Tadros. Had they done a proper investigation and publication of all relevant facts, they easily would have discovered the false nature of said statements. 8. Through the Defamatory Article and false statements contained therein, Defendants (1) damaged the reputations of Mr. Tadros and his businesses, (2) caused Mr. Tadros and his businesses to lose future business opportunities and damaged Mr. Tadros and his businesses’ existing business relationships, and (3) injured the emotional well-being of Mr. ‘Tadros. 9. Following the publication of the Defamatory Article, Mr. Tadros notified Defendants of the defamatory statements and true facts and demanded that Defendants publish a fall retraction and apology of the defamatory statements. Defendants refused. Mr. Tadros (0008199151) 2therefore was left with no alternative but to file this action and asserts herein claims for defamation, false light, intentional interference with contract, intentional interference with prospective business advantage, and infliction of emotional distress. PARTIES 10. Plaintiff, Philip Tadros, is an individual whose residence is located within Cook ‘County, the State of Illinois. Mr. Tadros is the founder, owner, and/or unit holder of Bow Truss, Doejo, Aquanaut, Budlong, and Funded Foods. At all times relevant to the claims contained herein, Mr. Tadros has been and remains a unitholder of the aforementioned business entities. 11. On information and belief, Defendant Crain Communications, Inc. is an Iinois corporation with its primary place of business located in Detroit, Michigan and at all relevant times owned and operated the weekly business newspaper Crain's Chicago Business, published and distributed in Chicago and online, 12, On information and belief, Defendant Peter Frost is an individual employed by Crain's Chicago Business as a journalist and resides in the State of Ilinois. 13. On information and belief, Defendant Michael Arnat is an individual employed by Crain's Chicago Business as an editor. Upon information and belief, his residence is located within the State of Ilinois. 14, Defendant, David Snyder, is an individual formerly employed by Crain’s Chicago Business as its publisher and resides in the State of Llinois. 15. On information and belief, Defendant Keith Crain is an individual who holds the title of Chairman at Defendant Crain’s, {0008199151} 316. On information and belief, Defendant Rance Crain is an individual who holds the title of President and Editorial Director at Defendant Crain’s as well as editor-in-chief of Crain’s Chicago Business. 17, On information and belief, Defendant KC Crain is an individual who holds the title of Executive Vice President and Director of Corporate Operations at Defendant Crain’s as well as group publisher of Crain’s Chicago Business. 18. On information and belief, Defendant Christopher Crain is an individual who holds the title of Executive Vice President and Director of Strategic Operations at Defendant Crain’s. 19. Plaintiff'is presently unaware of the identity of the Defendants sued herein as DOES 1-10, and will amend this complaint to identify them once Plaintiff learns of their identities, Defendants Crain’s, Frost, Arndt, Snyder, and DOES 1-10 are collectively referred to herein as “Defendants.” 20. On information and belief, Defendants, and each of them, were and are the agents, licensees, employees, partners, joint-venturers, co-conspirators, owners, principals, and employers of the remaining Defendants and each of them are, and at all times mentioned herein were, acting within the course and scope of that agency, license, parmership, employment, conspiracy, ownership, or joint venture. On further information and belief, the acts and conduct herein alleged of each of the Defendants were known to, authorized by and/or ratified by the other Defendants, and each of them. 21. Whenever in this complaint reference is made to any act of a Defendant, such allegation shall be deemed to mean the acts of the defendants named in the particular cause of action, and each of them, acting individually, jointly and severally. (0008199151) 4JURISDICTION & VENUE 22. Jurisdiction is appropriate pursuant to Section 9 of Article VI of the Illinois Constitution. 23. Venue is appropriate pursuant to 735 ILCS 5/2-101 FACTS RELEVANT TO ALL CAUSES OF ACTIONS 24. Onor about July 9, 2016, Crain’s Chicago Business published an article (the “Defamatory Article”) by Peter Frost entitled, “One of Chicago’s most connected entrepreneurs hhas made more than a few enemies.” A true and correct copy of the Defamatory Article is attached hereto as Exhibit A, The Defamatory Article remains on the website of Crain’s Chicago Business as of the date of this Complaint (http://www. chicagobusiness.com/article/20160709/ISSUE01/307099994/one-of-chicagos-most- connected-entrepreneurs-has-made-more-than-1-few-enemies). 25. Prior to the publication of the Defamatory Article, Frost had requested an interview with Mr. Tadros, to which Mr. Tadros accepted. Frost had portrayed the interview and impending article to be that of a typical “profile” article about local entrepreneurs in Crain's Chicago Business ~ showcasing the backgrounds and businesses of Chicago-based entrepreneurs (Crain’s touts that, as part of its brand, the mission of Crain's Chicago Business is to “help people succeed in Chicago”). 26. Defendants however had another agenda. Unbeknownst to Mr. Tadros at the time, Defendants intended to publish a “hit piece” about Mr. Tadros, portraying him as negatively as possible, and Defendants intended to use the article as a “special report,” in an attempt to attract readers and viewers of Defendants’ publications and websites. Mr. Tadros was duped. 27. The Defamatory Article was published as a front-page, full-cover “special report.” (0008199151), 528. As editor, Amdt oversaw production of the Defamatory Article, including the decision to place the Defamatory Article on the cover of Crain’s Chicago Business as a “special report.” 29. As publisher, Snyder oversaw production of the Defamatory Article, including the decision to place the Defamatory Article on the cover of Crain's Chicago Business as a “special report.” 30. As the executive management of Defendant Crain’s, including holding various positions for Crain's Chicago Business such as editor-in-chief and group publisher, Defendants Keith Crain, Rance Crain, KC Crain, and Christopher Crain ratified the decision to publish the Defamatory Article and place it on the cover of Crain's Chicago Business as a “special report.” 31. The Defamatory Article contained numerous false statements and misrepresentations. Overall, the Defamatory Article projects as a “hit piece” on Mr. Tadros and his business practices. 32. For example, the Defamatory Article strongly suggests that Mr. Tadros has improperly used company and/or investor money for his personal gain, stating among other things that “Tadros has lived large—driving a Mercedes-Benz G-Class, dining at expensive restaurants, holding his wedding reception at the Four Seasons Hotel—even as some of his businesses underperformed” and that Mr. Tadros “has “a knack for burning through other people’s money.” 33. Asa further example, the Defamatory Article strongly suggests that Mr. Tadros has engaged in illegal activity involving defrauding his investors, stating among other things that Mr. Tadros has engaged in “questionable accounting practices” that are “highly irregular for a {00081991;1) 6legitimate business operation” and that “funds appear to be being used for purposes other than investors intended.” 34. Asa further example, the Defamatory Article strongly suggests that Mr. Tadros has violated Securities and Exchange Commission (“SEC”) rules regarding public offerings. 35. Overall, the Defamatory Article strongly suggests that Mr. Tadros is unfit in his profession to run his businesses, stating amongst other things that he has engaged in a “pattem of mismanagement.” 36. Prior to the Defamatory Article’s publication, Mr. Tadros communicated with Amdt and Snyder to address the several inaccuracies and mistepresentations in the Defamatory Article. Amdt and Snyder ignored the issues raised by Mr. Tadros. 37. In authoring the Defamatory Article, Frost and Crain’s, with guidance from Amdt and Snyder, also edited and included quotes taken out-of-context to misrepresent statements from Mr. Tadros’ business partners. 38. For example, the Defamatory Article includes the following: Eric McNeil, co- founder, head brewer, and a minority shareholder in Aquanaut, says that when he leamed of the ‘transfers in and out of the Aquanaut account: “I was definitely pretty upset about it and pretty vocal about how this was not at all good.” After McNeil raised the issue with Tadros, he says, the activity stopped. “A lot of it happened without me knowing at first,” McNeil says. “We now have our own operations guy who is helping keep me updated on our activity.” 39. Eric McNeil contacted Mr. Tadros after the Defamatory Article’s publication about the above statements and informed Mr. Tadros that his quote was taken out-of-context and misrepresented his opinions regarding Mr. Tadros and Aquanaut, as well as the nature of (00081981;1) atAquanaut’s operations. Mr. MeNeil has also stated that he provided Crain’s with positive aspects of his dealings with Mr. Tadros, which were not reported in the Defamatory Article. 40. Asa further example, the Defamatory Article included a number of quotes from ‘Mr. Tadros” former partner Shaye Robeson. However, Defendants used only negative quotes and again took quotes out-of-context to misrepresent the statements from Mr. Robeson. 41. After publication of the Defamatory Article, Mr. Robeson stated: “When Crain’s interviewed me about Philip Tadros I shared many positive things about him and my experiences in dealing with Phil. Crain’s failed to print the positive attributes I said about Phil. Iregret being interviewed and feel mislead. I ask that Crain’s retract my ‘statement’ and perceived support of the extremely harsh article.” 42. Other parties quoted also contacted Mr. Tadros to retract or correct the statements, in the Defamatory Article. 43. Overall, Defendants not only knowingly misrepresented the facts about Mr. Tadros and his businesses in the Defamatory Article and intentionally refused to publish any positive facts about Mr. Tadros, Defendants also failed to conduct an adequate investigate for the ‘Defamatory Article that, if accurately and fairly reported, would not have made any of the many false and misleading defamatory statements. 44, For example, Defendants relied primarily on woefully incomplete company records. Therein, in suggesting that Mr. Tadros defrauded investors and mismanaged company finances, Defendants relied exclusively on limited documents from only two businesses: a 16- month period for Aquanaut and two years for Bow Truss ending in 2014. Defendants did not have current financial documents for all five of Mr. Tadros” businesses mentioned herein. Defendants had nothing close. Therefore, Defendants did not do, and could not have done, a (0008199131) 8reasonably adequate analysis, Rather, Defendants intentionally, or at least recklessly, jumped to unfounded conclusions based on incomplete records. 45. Defendants also relied on false and misleading information provided by Mr. Matthew, a disgruntled business associate, Defendants knew, or reasonably should have known, that Mr. Matthew was not a reliable source for accurate and objective information about Mr. ‘Tadros and his businesses. 46, Further, Defendants relied on false and misleading information provided by anonymous alleged sources. On information and belief, Defendants refused to identify these alleged sources because, at best, Defendants knew that the alleged sources were not reliable for accurate and objective information about Mr. Tadros and his businesses. 47. Inthe end, Defendants only investigated those individuals whom Defendants knew had a pre-existing bias against Mr. Tadros. Defendants intentionally failed to investigate anyone or anything that would conceivably portray Mr. Tadros in a positive light. Accordingly, Defendants knew, or reasonably should have known, that their sources were not reliable for accurate and objective information about Mr. Tadros and his businesses. 48. Had Defendants conducted a proper investigation prior to publishing the Defamatory Article, they would have discovered that the defamatory statements in the Defamatory Article are false because, at minimum: a, Mr. Tadros never used company or investor money for any personal reasons. b. Mr. Tadros has maintained accurate financial records for all of his businesses. ©. Mr. Tadros has not violated any securities rules. {0008399151} 9d. Mr. Tadros has run his businesses in a professional and competent manner. 49. Further, had Defendants conducted a proper investigation prior to publishing the Defamatory Article, they would have discovered that the truth is directly opposite to the defamatory statements in the Defamatory Article, For example, had Defendants conducted a proper investigation, they would have leamed that Mr. Tadros is personally owed substantial ‘money from his businesses. Further, had Defendants conducted a proper investigation, they ‘would have leamed that Mr. Tadros has contributed substantial money of his own to help grow the businesses. 50. The reality is that Defendants wanted to create a salacious “hit piece” to attract readers and viewers of Defendants’ publications and websites. In doing so, Defendants intentionally failed to fully investigate Mr. Tadros and his business, intentionally omitted positive facts about Mr. Tadros, and intentionally spun statements to become false, misleading, and defamatory, in order to serve Defendants’ interests, 51. Defendants’ plan to intentionally defame Mr. Tadros is further evidenced by the fact that Frost appears to have a personal motive to harm Mr. Tadros. On information and belief, Frost has engaged in conduct directed at Mr. Tadros that exceeds the bounds of legitimate journalism, including without limitation publishing personal issues concerning Mr. Tadros on social media and attending court hearings involving Mr. Tadros in a domestic divorce case, 52. Defendants furthered their plan by heavily promoting the Defamatory Article, including inserting links to it in numerous other articles on Crain’s Chicago Business and elsewhere, most of which have nothing to do with Mr. Tadros or his businesses. Further, on information and belief, Defendants submitted the Defamatory Article for an award. {0008399151}, 1053. Defendants also promote the Defamatory Article in their December 29, 2016 article titled “Crain’s top stories on social media in 2016” (http:/www.chicagobusiness.convarticle/20161229/NEWS07/1612299 14/erains-top-stories-on- social-media-in-2016), wherein the Defamatory Article is listed as the 5* top story on Crain’s Twitter page. Further, Defendants promote the Defamatory Article in their December 19, 2016 article entitled “13 intriguing people of 2016” sobusiness.com/article/20161219/NEWS07/161219909/1: (http://www intriguin; le- of-2016). On information and belief, Defendants have paid to advertise the Defamatory Article on third party platforms, including Facebook. 54, The publication of the Defamatory Article has caused great harm to Mr. Tadros and his businesses. 55. Bow Truss, Doejo, Aquanaut, and Budlong are actively conducting business and, prior to the Defamatory Article’s publication, were growing and expanding operations. 56. Atthe time of the Defamatory Article’s publication, Funded Foods was preparing to launch its operations. 57. Following the Defamatory Article’s publication, Mr. Tadros and his businesses lost accounts, investors, and contracts, including but not limited to the following: a, Mr. Tadros’ businesses lost numerous accounts. For example, Bow Truss lost accounts with Hilton Hotels, Merchandise Mart, Whole Foods, and University of Chicago. Doejo lost its account with Lurie’s Children’s Hospital; {00081991;1), ub, Mr. Tadros’ relationship with his partner in Budlong deteriorated, causing the closure of a restaurant and disputes within the business, thereby placing its future in jeopardy; ¢. Numerous current investors withdrew or attempted to withdraw their investments from Mr. Tadros’ businesses, including Bow Truss, Doejo, Aquanaut, Budlong, and Funded Foods; d. Prospective investors withdrew their interest in partnering with Mr. Tadros and investing in his businesses; €. Mr Tadros” landlords for his several businesses attempted to terminate their leases with Mr. Tadros and his businesses; f. Mr Tadros’ lenders declared Mr. Tadros and his businesses to be in default on various obligations; g. Mr. Tadros’ relationships with various vendors for his several businesses were damaged, impairing his ability to operate his businesses; h. Mr. Tadros’ personal relationships, including his marriage, deteriorated as 2 direct result of the misrepresentations about Mr. Tadros’ character contained in the Defamatory Article 58. Defendants knew of Mr. Tadros’ and his businesses’ accounts, investors, and contracts and intentionally interfered with them. 59. For example, on information and belief, Frost contacted numerous third parties, including without limitation Hilton Hotels, before and after publication of the Defamatory Article in an effort to directly disrupt Mr. Tadros” and his businesses’ relationships with those third parties. (0008199131) 1260. Asa direct and proximate result of Defendants’ conduct, Mr. Tadros has suffered harm in the form of emotional distress and substantial damages to his reputation and personal and professional relationships, and Mr. Tadros and his businesses have suffered harm in the form of economic damages. As the founder, owner, and/or unit holder of Bow Truss, Doejo, Aquanaut, Budlong, and Funded Foods, Mr. Tadros has suffered severe economic damages in the ‘form of lost profits, depreciation of the value, and loss of potential opportunities of the businesses. 61. Overall, the false and misleading statements contained in the Defamatory Article damaged Mr. Tadros both personally and professionally and harmed his businesses in the aforementioned manner, including Bow Truss, Doejo, Aquanaut, Budlong, and Funded Foods. FIRST COUNT (Defamation - Plaintiff Against AUl Defendants) 62. Plaintiff hereby incorporates by this reference each allegation set forth in paragraphs 1 through 61 of this Complaint as if fully set forth herein. 63. Defendants, through the Defamatory Article, published numerous false and defamatory statements, described above, regarding Mr. Tadros and his businesses. 64. Defendants’ publication of the Defamatory Article was not privileged. 65. The statements described above are false and misleading statements regarding Mr. Tadros, which attack and undermine his integrity, knowledge, and experience, as well as the legitimacy of Bow Truss, Doejo, Aquanaut, Budlong, and Funded Foods. 66. The false and misleading statements included in the Defamatory Article impute the commission of criminal activity on the part of Mr. Tadros including, but not limited to, violations of securities laws and regulations, misappropriation of corporate funds, and related offenses concerning the operations of Mr. Tadros’ businesses. {00081981;1) 1367. The false and misleading statements included in the Defamatory Article prejudiced Mr. Tadros in his ability to operate his businesses, thereby causing harm to Mr. Tadros, personally, as well as to Bow Truss, Doejo, Aquanaut, Budlong, and Funded Foods, by wrongfully asserting, among other things, that Mr. Tadros misuses investor funds and mismanages his businesses. 68. Mr, Tadros informed Defendants, including Amdt and Snyder, of the falsehoods and misrepresentations contained in the Defamatory Article prior to publication. Defendants proceeded to publish the Defamatory Article with the false statements anyway. 69. Defendants knowingly misrepresented the statements contained within the Defamatory Article, including the editing of statements from investors and business partners and. failure to provide the context in which the statements were made. 70. Defendants intentionally failed to fully investigate the sources and motives for statements and information contained in the Defamatory Article to confirm their truth and accuracy. 71. Asaresult, the falsehoods and misrepresentations contained in the Defamatory Article were made with actual malice by the Defendants, justifying an award of punitive damages in Plaintiff's favor. 72. Asadirect and proximate result of Defendants’ conduct, Mr. Tadros has suffered harm in the form of emotional distress and substantial damages to his reputation and personal and professional relationships, and Mr. Tadros and his businesses have suffered harm in the form of economic damages. 73. | WHEREFORE, Plaintiff, Philip Tadros, respectfully requests that this Court enter judgment in his favor and against Defendants, Crain Communications, Inc., Peter Frost, Michael 0008199151} 14Amdt, David Snyder, Keith Crain, Rance Crain, KC Crain, and Christopher Crain for compensatory damages in an amount to be proven at trial but no less than $38,000,000, for interest, costs, and fees as appropriate, and for all other relief this Court deems just and appropriate. SECOND COUNT (False Light - Plaintiff Against All Defendants) 74, Plaintiff hereby incorporates by this reference each allegation set forth in paragraphs | through 61 of this Complaint as if fully set forth herein. 75. The Defendants, through the Defamatory Article, published the numerous statements described above regarding Mr. Tadros and his businesses. 76. The several statements described above are false and misleading statements regarding Mr. Tadros, which attack and undermine his integrity, knowledge, and experience, as well as the legitimacy of Bow Truss, Doejo, Aquanaut, Budiong, and Funded Foods. 77. — Due to the false and misleading nature of the above-described statements, Mr. ‘Tadros, including his character and business acumen, were placed in a false light before the public. 78, The nature of Defendants’ misrepresentations was highly offensive to a reasonable person in that they portrayed that, among other things, Mr. Tadros misuses investor funds and mismanages his businesses, and impute the commission of criminal activity on the part of Mr, Tadros. 79. Mr. Tadros informed Defendants, including Arndt and Snyder, of the falsehoods and misrepresentations contained in the Defamatory Article prior to publication. Defendants proceeded to publish the Defamatory Article with the false statements anyway. (0008199131) 1580. Defendants knowingly misrepresented the statements contained within the Defamatory Article by editing statements from investors and business partners and failing to provide the context in which the statements were made. 81. Defendants intentionally failed to fully investigate the sources and motives for statements and information contained in the Defamatory Article to confirm their truth and accuracy. 82. Asarresull, the falsehoods and misrepresentations contained in the Defamatory Article were made with actual malice by the Defendants, justifying an award of punitive damages in Plaintif?’s favor. 83. As a direct and proximate result of Defendants’ conduct, Mr. Tadros has suffered harm in the form of emotional distress and substantial damages to his reputation and personal and professional relationships, and Mr. Tadros and his businesses have suffered harm in the form of economic damages. 84, | WHEREFORE, Plaintiff, Philip Tadros, respectfully requests that this Court enter judgment in his favor and against Defendants, Crain Communications, Inc., Peter Frost, Michael Amat, David Snyder, Keith Crain, Rance Crain, KC Crain, and Christopher Crain for compensatory damages in an amount to be proven at trial but no less than $38,000,000, for interest, costs, and fees as appropriate, and for all other relief this Court deems just and appropriate. THIRD COUNT (intentional Interference with Business Expectations - Plaintiff Against All Defendants) 85. Plaintiff hereby incorporates by this reference each allegation set forth in paragraphs 1 through 61 of this Complaint as if fully set forth herein. (0008199131) 1686. Defendants, through the Defamatory Article, published the numerous statements described above regarding Mr. Tadros and his businesses. 87. The several statements described above are false and misleading statements regarding Mr. Tadros, which attack and undermine his integrity, knowledge, and experience, as well as the legitimacy of Bow Truss, Doejo, Aquanaut, Budlong, and Funded Foods. 88. At the time of the Defamatory Article’s publication, Mr. Tadros, Bow Truss, Doejo, Aquanaut, Budlong, and Funded Foods possessed valuable relationships with investors and business partners, as well as clients, vendors, and landlords and reasonably expected to enter additional business relationships to maintain and grow the businesses. 89. Defendants knew of Plaintiff's current and potential business relationships with third parties. 90. By publishing the Defamatory Article, Defendants intended to harm Mr. Tadros’ businesses by destroying the aforementioned relationships and preventing those relationships from continuing or starting. 91. Following the Defamatory Article’s publication, each of the aforementioned relationships deteriorated, destroyed, and/or were prevented from ripening into a valid business relationship. 92. For example, Bow Truss, Doejo, Aquanaut, and Budlong were growing and expanding operations prior to the Defamatory Article’s publication but have since lost current and potential business relationships with third parties to grow and expand operations. 93. Asa further example, Funded Foods was preparing to launch its operations at the time of the Defamatory Article’s publication but has since lost current and potential business relationships with third parties to launch its operations. (0081991;1) 794. Additionally, since the publication of the Defamatory Article, Mr. Tadros” has lost existing and prospective relationships with investors and business partners. 95. Asadirect and proximate result of Defendants’ conduct, Mr. Tadros has suffered harm in the form of emotional distress and substantial damages to his reputation and personal and professional relationships, and Mr. Tadros and his businesses have suffered harm in the form of economic damages. As the founder, owner, and/or unit holder of Bow Truss, Doejo, Aquanaut, Budlong, and Funded Foods, Mr. Tadros has suffered severe economic damages in the form of lost profits, depreciation of the value, and loss of potential opportunities of the businesses. 96. | WHEREFORE, Plaintiff, Philip Tadros, respectfully requests that this Court enter judgment in his favor and against Defendants, Crain Communications, Inc., Peter Frost, Michael Amat, David Snyder, Keith Crain, Rance Crain, KC Crain, and Christopher Crain for compensatory damages in an amount to be proven at trial but no less than $38,000,000, for interest, costs, and fees as appropriate, and for all other relief this Court deems just and appropriate. FOURTH CAUSE OF ACTION (Intentional Interference With Contract - Plaintiff Against All Defendants) 97. Plaintiff hereby incorporates by this reference each allegation set forth in paragraphs 1 through 61 of this Complaint as if fully set forth herein. 98. Defendants, through the Defamatory Article, published the numerous statements described above regarding Mr. Tadros and his businesses. 99. The several statements described above are false and misleading statements regarding Mr. Tadros, which attack and undermine his integrity, knowledge, and experience, as, well as the legitimacy of Bow Truss, Doejo, Aquanaut, Budlong, and Funded Foods. 0008199151), 18100. At the time of the Defamatory Article’s publication, Bow Truss, Doejo, Aquanaut, Budlong, and Funded Foods possessed valid, valuable contracts with third parties, including clients, vendors, and landlords. 101. For example, Bow Truss held accounts with, among others, Hilton Hotels, Merchandise Mart, Whole Foods, and University of Chicago. Doejo held an account with, among others, Lurie’s Children’s Hospital. 102. Each of the aforementioned contracts was in effect and expected to continue for the foreseeable future without interruption. 103. Defendants knew of Plaintiff's contracts with third parties. 104, By publishing the Defamatory Article, Defendants intended to harm Mr. Tadros* businesses by destroying the aforementioned contracts and preventing those relationships from. continuing. 105. Following the Defamatory Article’s publication, each of the aforementioned contracts was breached. 106. For example, Bow Truss lost its accounts with Hilton Hotels, Merchandise Mart, Whole Foods, and University of Chicago. 107. Doejo lost its account with Lurie’s Children’s Hospital. 108. As a direct and proximate result of Defendants’ conduct, Mr. Tadros has suffered harm in the form of emotional distress and substantial damages to his reputation and personal and professional relationships, and Mr. Tadros and his businesses have suffered harm in the form of economic damages. As the founder, owner, and/or unit holder of Bow Truss, Doejo, Aquanaut, Budlong, and Funded Foods, Mr. Tadros has suffered severe economic damages in the (0008199151) 19form of lost profits, depreciation of the value, and loss of potential opportunities of the businesses. 109, WHEREFORE, Plaintiff, Philip Tadros, respectfully requests that this Court enter judgment in his favor and against Defendants, Crain Communications, Inc., Peter Frost, Michael Amdt, David Snyder, Keith Crain, Rance Crain, KC Crain, and Christopher Crain for compensatory damages in an amount to be proven at trial but no less than $38,000,000, for interest, costs, and fees as appropriate, and for all other relief this Court deems just and appropriate. FIFTH CAUSE OF ACTION (Intentional Infliction of Emotional Distress - Plaintiff Tadros Against All Defendants) 110. Plaintiff hereby incorporates by this reference each allegation set forth in paragraphs 1 through 61 of this Complaint as if fully set forth herein. 111. Defendants, through the Defamatory Article, published the numerous statements described above regarding Mr. Tadros and his businesses. 112. The several statements described above are false and misleading statements regarding Mr. Tadros, which attack and undermine his integrity, knowledge, and experience, as well as the legitimacy of Bow Truss, Doejo, Aquanaut, Budlong, and Funded Foods. 113. The nature of Defendants’ misrepresentations was extreme and outrageous in that they portrayed that, among other things, Mr. Tadros misuses investor funds and mismanages his, businesses, and they impute the commission of criminal activity on the part of Mr. Tadros. 114, By publishing the Defamatory Article, Defendants intended to harm Mr. Tadros’ businesses and cause him severe emotional distress or, at least, knew that there was a high probability that their conduct would cause Mr. Tadros severe emotional distress 0008199131) 20115. Asa direct and proximate result of Defendants’ conduct, Mr. Tadros has suffered harm in the form of severe emotional distress, as well as substantial economic damages as described herein, 116. WHEREFORE, Plaintiff, Philip Tadros, respectfully requests that this Court enter judgment in his favor and against Defendants, Crain Communications, Inc., Peter Frost, Michael Amdt, David Snyder, Keith Crain, Rance Crain, KC Crain, and Christopher Crain for compensatory damages in an amount to be proven at trial but no less than $38,000,000, for interest, costs, and fees as appropriate, and for all other relief this Court deems just and appropriate. DEMAND FOR JURY TRIAL Plaintiff demands a trial by jury. PRAYER FOR RELIEF WHEREFORE, Plaintiff respectfully requests: (a) An award of damages in an amount to be determined at trial but no less than $38,000,000; (b) An award of punitive damages in an amount to be determined at trial; (©) Amorder requiring a retraction of the Defamatory Article; (@ — Anorder granting preliminary and permanent injunctive relief to prevent Defendants from continuing to publish or disseminate the Defamatory Article; and (©) Such other and further relief as the Court may deem just and proper. 0008199151}, 21Dated: July 7, 2017 Floor, Chicago, IL 60611 (0008199131) 2IN THE CIRCUIT COURT OF COOK COUNTY, ILLINOIS COUNTY DEPARTMENT, LAW DIVISION Philip Tadros, Plaintiff, Jury Trial Demanded % Crain Communications, Inc., Peter Frost, Michael Amdt, David Snyder, Keith Crain, Rance Crain, KC Crain, Christopher Crain, and Does 1-10, Defendants. ) ) ) ) ) ) ) ) ) ) ) ) Affidavit Pursuant To Supreme Court Rule 222(b) I, Philip Tadros, state as follows: 1. Tama named Plaintiff in this cause. 2. Pursuant to Supreme Court Rule 222(b), I certify that Plaintiff seeks money damages in excess of Fifty Thousand and 00/100ths Dollars ($50,000). Dated: July 7, 2017 Respectfully submit Address: 444 N.\Ws Tel: (708) 655-6753 Email: phil@dogjo.com Sth Floor, Chicago, IL 60611 {0008199151}, 23EXHIBIT ACRAIN'S & ei POM RL aN July 09, 2016 One of Chicago's most connected entrepreneurs has made more than a few enemies OEeBe SyPETERFROST WF Photo by Dave Renauskas As he seeks cash to fund a brewpuls and more Bow Truss and Budlong locations, Chicago entrepreneur Phil Tacros has lft in his wake lawsuits, failed businesses, unhappy clients, vendors and investors.Philip Tadros sat among his food-and-beverage industry peers on an entrepreneur panel in February, speaking with the confidence and swagger of someone accustomed to getting what he wants. The self-proclaimed serial entrepreneur best known for his Bow Truss coffee shops told the crowd that in the previous year, ‘we've probably raised like $2 millon” in investments just from customers of his businesses. The secret, he said: “I make it super easy to give me money.” A fountain of ideas, with a sensibility for design and branding, and a seemingly unlimited supply of charm, hustle and connections, Tadros in the past decade has persuaded mostly sophisticated, high-net-worth investors to back his businesses, which include Bow Truss, a chain of 10 coffee shops and a roaster that also sells wholesale to more than 160 accounts, like Whole Foods and Virgin Hotels in Chicago; technology/marketing/branding agency Dosjo; Bowmanville brewery Aquanaut; and Budlong, a chicken restaurant. Sign up for the free Today's Crain's newsletter Sign up for the free Today's Crain's newsletter But as Tadros seeks new investors to fund at least a dozen more Bow Truss shops, an Aquanaut brewpub and more locations of Budiong—using Facebook to hawk the opportunities in some instances—he has left in his wake at least 15 lawsuits, plus failed businesses, unhappy clients and vendors, and angry investors, some of whom say they don't expect to recoup thelr invested capital, not to mention a return on those investments. A review of Tadros' operations, coupled with interviews with more than two dozen former business partners, associates, investors, vendors and clients, reveals a pattern of mismanagement, questionable accounting practices, and, some say, a penchant for falling behind on bills and a knack for burning through other people's. money. The vast majority say they would never do business with Tadros again.Peto by John R. Bosh photos ‘Some of Tadros' current and former businesses, clockwise from top left: Bow Truss, Budlong, Doejo, Dollop and Aquanaut. Tadros dismisses any suggestion of impropriety. Disputes with clients and vendors, as well as lawsuits, are part of the normal course of conducting business, he says. “We never did anything wrong,” Tadros says at Doejo's Lakeview offices recently, dressed in his usual T-shirt and jeans. “And if we did, we would never do it because we wanted to do something wrong.” He says Doejo is profitable, and Bow Truss, Aquanaut and Budiong would be, too, if their proceeds weren't being plowed into growth. Former investors and associates expressed discomfort with some aspects of the way Tadros ran his businesses. For one thing, it was hard to tell where one Tadros company begins and another ends financially, according to these people and bank records obtained by Crain's. The bank records, which cover a 16-month period for Aquanaut and more than two years for Bow Truss ending in 2014, show dozens of bank transfers that follow a similar pattern: Nearly every month, money went back and forth between Aquanaut, Bow Truss, Doejo and other accounts associated with Tadros, even though each entity had a distinct group of investors. In total, approximately $800,000 moved between those accounts via wire transfers and checks, according to a Crain’s analysis of the records. The transactions were typically preceded by new investment or were conducted to bring bank accounts back into positive territory, a near-constant struggle for Bow Truss, the records show. “The stench here is overwhelming,” says Chicago attorney Neal Levin, head of the fraud and internal investigations practice and the internal intelligence unit at law firm Freeborn & Peters. He reviewed the documents at the request of Crain's. Levin says the volume of wire transfers and other transactions among the separate companies controlled by Tadros “is highly irregular for a legitimate business operation’ and “beyond sufficient to justify a complete audit and accounting of all associated businesses.”‘INTERCOMPANY TRANSFERS' Tadros says such “intercompany transfers” were conducted routinely to “patch” shortfalls at each company. Because either Tadros or his tech firm, Doejo, are majority owners and managers in each company, he insists that the transactions are proper, as long as all the accounts are reconciled, “We're doing best by our companies and people by patching and reconciling,” he says. “If somebody needs help, you help them, you document it and you reconcile it. Nothing has ever been wrong, That's a fact.” if that means Bow Truss needs to transfer money to Aquanaut or Doejo needs to transfer money to Bow Truss to make payroll, “you better believe . . . we're going to fucking make payroll because we're managing our babies,” Tadros says. Many companies treat the movement of money between separate businesses as loans, which pay interest, but Tadros says his companies did not. “I think our tax lawyer said that there's a way that we're supposed to do ‘something like that . . . but no, we don't do interest,” he says. “It's basic business.” While the existence of the transfers alone does not indicate wrongdoing or malfeasance, investors are right to reise questions, Levin says. Most troubling is that the funds appear to be being used for purposes other than investors intended, Levin says. Paul B. Cogswell is managing director of compliance and corporate investigations at accounting firm McGovern & Greene in Chicago. “Even if you put the money back, you have deprived a shareholder from the temporary use of capital which was intended for the sole purpose of bettering the business that he invested in,” says Cogswell, a cettified fraud examiner who has no dealings with Tadros. “At the very least, he may have some explaining to do." Eric McNeil, co-founder, head brewer and a minority shareholder in Aquanaut, says that when he leaned of the transfers in and out of the Aquanaut account, “I was definitely pretty upset about it and pretty vocal about how this was not at all good.” After McNeil raised the issue with Tadros, he says, the activity stopped. “A lot of it happened without me knowing at first,” McNeil says. “We now have our own operations guy who is helping keep me updated on our activity.” INVESTORS GET OUT When investors learned of such activity, many of them sought to get out. Of the first six partners in Bow Truss, founded in late 2011, just two remain today. One is Tadros' tech company, Doejo; the other is Chicago serial investor Alan Matthew.‘Alan Matthew Matthew, who has invested in more than 30 companies, including parking app SpotHero and Raise, a gift card marketplace, says he put more than $200,000 into three startups controlled at least in part by Tadros: mobile apps Tagyoureit and MeUngry, as well as a game, “Map of the Dead.” Tagyoureit and MeUngry were both dissolved. “Map of the Dead’ stil exists, but Matthew says he doesn't expect to see a return on those investments or see any of his money back. “That money is gone,” he says. ‘Tadros confirms that Matthew lost money on the three web projects and says investors in “Map of the Dead” will not be paid back. “You know, we tried,” he says. ‘As an early investor in Bow Truss, Matthew says he has requested the company's financial data several times in the past 12 months, which the company is required to provide to investors per an operating agreement. He says he has yet to receive any documents. ‘Tadros responds that Matthew “can have whatever he wants, but we just don't want to talk to him.” Other Bow Truss investors, including co-founders Josh Elyachar of New York and Chicago tech entrepreneur Seth Kravitz, exited Bow Truss because of concems about the way Tadros was running the company, several sources tell Crain's. At least one—Kravitz—abandoned his entire six-figure investment in Bow Truss, dissolving his shares without payment to make a quick exit and distance himself from the company, those sources say. Kravitz confirms that he walked away from Bow Truss without recouping his investment but declines to comment further. Elyachar and another Bow Truss investor, Brett Holmes, exited both Bow Truss and their investments in Aquanaut, sources say. Elyachar and Holmes decline to comment. ‘Tadros says his early group of investors “were inexperienced in building something” and “were blocking me from growing,” so he “had to remove them and buy them out.”Aside from Kravitz, all original Bow Truss investors have been or are in the process of being paid back, Tadros says. He adds that his new investors, which include two real estate firms, are seasoned, “drama-free problem- solvers” that know how to build companies. BUDDING ENTREPRENEUR Tadros, 37, was born in Chicago and grew up in Palos Heights, the son of Jordanian immigrants. His late father was an entrepreneur who owned seven neighborhood grocery stores. An uncle, Musa Tadtros, is a well-known Chicago real estate developer. In 2000, the same year he stopped attending classes at Columbia College in Chicago, Tadros, 21, bought Don's Coffee Club in Rogers Park for $14,000. He sold the business less than a year later for $34,000. (Published reports on the price Tadros paid for the business range from $13,000 to $20,000.) Over the next several years, he opened four more coffee shops on Chicago's North Side: Chase Cafe, Dollop, Noble Tree and Kickstand Espresso Bar. It was also during the mid-2000s that a profile began to emerge, several sources who knew Tadros at the time tell Crain's. Tadros was disarmingly funny, carefree, creative and generous. He was relentlessly optimistic, a skilled salesman adept at building out fashionable storefronts and persuading people to invest in or alongside him.TADROS COMPANIES SINCE 2000 2000 = 2008 += 20022004 +2006 2008 «=| «2008 = 2008 Don's Chase Evanston Dollop | Metroproper — Daejo Noble Haystack Coffee Cafe Wireless Coffe=Digitalfirm © Digital:~«» «Tree «= Vintage Club Coffee Wireless shop | agency, tech Coffee Retail Coffeeshop shop retailer developer | shop shop f 1 } } Sold Closed Sold Sold Dissolved Exists Closed Closed 2009200 | 200} th 20 | 20 Texthog — Kickstand Cafe University | Bow Truss “Map ofthe | Aquanaut Expense Coffee Columbia College | Chain of Dead” Brewing tracker shop | cafesffood serv- | coffee shops Digitalf | Company ice contract | mobile game Brewery I | | i i Dissolved | Given Closed Exists, | Exists «| _Exists Reimagined as| away | Contract | Expanding | Limited | Formedas spendoutcom | | ees | activity | Strenge Pefcan 2012 23 2013 2013 2014 Next Door MeUngry/ | Funded Foodstransiormed | Oyster Pail ‘Tagyoureit Services Coffee WeUngry in Z0i6toaportalfor Proposed Mobile app shop operated | Mobile app | crowdfundingandholding | oyster and for State Farm | company for foodassets | cocktail bar Exists Dissolved | Exists Never Dissolved | opened 2014 2015 20 =| (2016 2016 2016 Spendout Bunny — Spaceby —Budiong = Apotheca. «= —Beckon Expense Restaurant Dojo Chicken | Juice ~—‘Subscrigtion tracker and bakery Coworking | restaurant | company chocolate | sxe | tain | company Exists Closed | Exists, «Exists Launching | Launching limited | | Expanding Expanding soon soon activity | | t The same sources say Tadros also had a grandiose self-image and fell woefully short in his ability to run a business. ‘He's a guy with great ideas,” says one former business partner who declines to be named for fear of legal action. “A person who's always on top of the latest trend. But he never sees anything through. When things g0 sideways, Phil runs away.” ‘Tadros denies that he runs away from problems. “We just take (a lot) of risks on people and ideas, and some work, others don't; but that's life, we are trying our best.” UNHAPPY PARTNERSTadros has lived large—driving a Mercedes-Benz G-Class, dining at expensive restaurants, holding his wedding reception at the Four Seasons Hotel—even as some of his businesses underperformed. Photo by Jon Books ‘Shaye Robeson, who ran Dollop with Tadtos from 2004 to 2011, says Tadros “had no idea how to run or grow a business.” ‘Shaye Robeson ran Dollop with Tadros from 2004 to 2011. The cafe, which has become a nine-store chain under new ownership, was never as profitable as Robeson envisioned. Robeson says he fronted about $80,000 to launch Dollop, with Tadros earning a 30 percent share of the business for managing its build-out and operations. Robeson says his old friend was “creative, inspiring and sociable,” but was “incredibly scattered and disorganized” and “had no idea how to run or grow a business.” After a bit more than a year in business, Robeson took on Doliop's financial management “because it was clear Phil wasn't doing any of it. | don't think Phil had any idea what a (profit-and-loss statement) was,” he says. Tadros confirms Robeson's account and says his former business partner should have taken control of Dollop's finances from the beginning. “That's not my forte by any means. It never was,” he says. “Everybody knows that.” Within about four years, Robeson says, Tadros was largely disengaged from the business, instead focusing on his other projects. After battling Tadros for control of the business, Robeson eventually bought him out in 2011 and sold Dollop later that year. While he was negotiating his exit from Dollop, Tadros scored a five-year contract to manage three cafes on the campus of Columbia College through a new company, Cafe University. ‘Two of the cafe's vendors have complained that Tadros was late with payments or withheld them altogether. One was Tony Dreyfuss, founder of Metropolis Coffee. Dreyfuss sold Tadros coffee for his Columbia College cafes but says he had to write off “several thousand dollars” of unpaid bills. The other was Southport Grocery owner Lisa Santos, who sued Cafe University in 2012 over more than $13,000 in unpaid invoices. The case was settled out of court, with Tadros agreeing to pay Southport $10,000, Santos says. “If | didn't take him to court, ! wouldn't have seen any of this, and that's a huge hit for a business our size,” she says.Prot by Jo A. Bostn Southport Grocery owner Lisa Santos sued a Tados company in 2012 over more than $19,000 in unpaid invoices. Tadros blames the unpaid balances on Jacob Shapiro. In February 2011, Tadros signed over Cafe University and two other coffee shops to Shapiro, effective Dec. 31, 2010. “He racked up that bill, and | got stuck with i," Tadros says, When Shapiro took control of the business, he inherited unpaid invoices to Southport of about $9,600, according to Southport’s lawsuit, ‘Shapiro says he handed the shops back to Tadros in about July 2011, purposely defaulting on payments to Tadros after finding the business had liabilities far beyond what Tadros had communicated before the sale. “The amount of accurate, quality, industry-standard bookkeeping that was going on was a sum total of zero,” Shapiro says. Tadros says he eventually paid Santos back—both for bills accrued on his watch and Shapiro's. He does not comment directly on the bookkeeping but says he's been involved in many companies, and “had a lot of situations good and bad.” Columbia College says it declined to renew Cafe University's contract in 2015, though Tadros says he walked away because he was not interested in a one-year option offered by the college. The Southport suit was one of at least 15 filed against Tadros and his related businesses in Cook County Circuit Court since 2004, The complaints range from unhappy clients claiming they didn't get the services or products they paid for to a landlord claiming Doejo owed $58,000 in back rent. Nearly all were settled out of court. ‘Among the cases: * Erineo Carranza alleged that Doejo was paid $261,266 in 2012 to begin work on a renovation project for Chicago's Congress Theatre, but Tadros refused to provide a full accounting of expenses. Carranza said in the suit that the money paid for the services was “greatly in excess of the work performed (and) material provided.” He alleged that Doejo spent the money “for personal purposes” and applied it “to projects unrelated” to the Congress property. The case was settled out of court in March 2014, ‘Tadros says he did branding work and bought “tons of furniture and equipment.” He says he settled,paying Carranza about $40,000 in unspent funds. © Chicago-based e-commerce company GimmeAnother said it paid Doejo $70,000 to build mobile apps, but Dogo failed to deliver on several key provisions and refused to refund the company for work not delivered. “Sometimes you're going to get some startup clients who want, and want and want more, and don't understand the process,” Tadros says in response. The case, in which GimmeAnother sought more than $50,000, was settled in February 2014 for unknown terms, * ABussian web development company alleged that it provided services to Dogjo starting in 2011 but that in June 2013 Doejo stopped paying its invoices. In a lawsuit, the company alleged that Tadros and Doejo partner Darren Marshall “comingled (their) own funds” with Doejo's, diverted funds from Doejo and used Doejo furids “to pay for personal purchases, vacations, meals, and travel for personal use and other personal transactions.” ‘Tadros says he disputed invoices from the contractor because its work was subpar. The case, in which the web development company sought $67,897, was settled in April. Tadros says he paid the company “like $20,000.” * The Chicago branch of office-sharing company Industrious sued Tadros in early 2014, alleging he took its client lists, blueprints, building plans and pricing strategies to start his own competing co-working space. Tadros, who had a 3 percent stake in Industrious' Bureau River North, admitted in court that he tried to solicit several of its tenants for his competing co-working company, Space by Doejo, which opened blocks away about a year later. “The episode with Phil Tadros was a painful moment in the early days of our company,” industrious co- founder Jamie Hodari says. “Im sure we're not alone in wanting to forget and move on from our dealings with him” Tadros says he never signed a nondisclosure agreement and tried to give his shares of the company back after its principals insulted him. Tadros says industrious wouldn't allow him to leave. "I built that company. | filled up that floor, and | helped them raise a quarter-million dollars,” Tadros says. When the company planned to expand, it shut him out, he says. “For me, that's the biggest insult.” The case settled in April 2014, with Tadros' stake in Industrious dissolved in exchange for him being allowed to build Space by Dosjo with certain restrictions. OYSTER FAIL In late 2013 and early 2014, Tadros persuaded a handful of investors —including two prominent Chicago entrepreneurs who decline to be named because they don't want to be publicly associated with the project—to put money toward a tiny Lakeview cocktail bar and restaurant called Oyster Pail. But after rehabbing a storefront, installing plumbing and electric, and telling investors he was getting closer to ‘opening, Tadros never got it off the ground. As majority owner in a brewery, Tadros says, he could not get a permit because, under state law, he could not own more than 4.9 percent of a restaurant serving alcohol unless it produced beer on premises. “i's something he obviously should have known,” one investor says. Those investors did not get their money back. “Legally, | can say this thing lost,” Tadros says. “We alll lost.” In January 2015, soon after he told investors to write off their investment in Oyster Pail, he announced he was partnering with Michelin-starred chef liana Regan, partner of Elizabeth Restaurant, to open Bunny the Microbakery. But that project, too, was beset by delays when Regan couldn't get required licensing because Tacros hadn't obtained city construction permits for the build-out, sources say.Tadros responds that in the process of converting the space from an oyster bar into a bakery, “| tried to make some modifications that really needed to be redrafted and submitted under a new entity, so | tried to help and open quickly to help turn the lost project around, and it took longer.” When it finally opened more than six months late, Bunny almost immediately fell short on cash. The bakery closed within three months, a high-profile embarrassment for Regan, who declines to comment. As of late June, Tadros was late on bills to some of Bunny's vendors. Among them was Local Foods, which was ‘owed about $2,000, says Chairman Jim Murphy. ‘Tadros says he's making payments or plans to make payments to each of those vendors. “We are making it right and taking it on.” BUDLONG EXPANSION Weeks after Bunny closed, Tadros announced another tenant: his new Nashville-style hot chicken restaurant Buciong, It opened in May, and he's planning at least three more locations. ‘Tadros has continued to expand Bow Truss, which has 10 locations, including one in Beverly Hills, Calif. He says he's planning to open at least 14 more Bow Truss cafes within the next 18 months, with most on the North and Near West sides of Chicago. He's also launching two more businesses this year: juice company Apotheca and subscription chocolate company Beckon. To fund the new projects and expansions, Tadros is back on the circuit with an outstretched hand. In January, he solicited investors on his personal Facebook page, touting the chance to get in on two fast-growing success stories. He offered 3 percent stakes in Bow Truss for $250,000, giving the company an implied valuation of $8.3 million. In @ separate post, he offered 10 percent stakes of Aquanaut for $250,000, giving the brewery an implied valuation of $2.5 million. The offers, each viewable to the public, qualify as a “general solicitation” by the Securities and Exchange Commission, which would typically require Tadros to file a form in the event he sold any stock via the Facebook posting. “In general, public advertising of the offering, and general solicitation of investors, is incompatible with the nonpublic offering exemption,” the securities regulator says on its website. ‘Tadros says he was not required to and did not make any such filings because he didn't sell any securities from the Facebook solicitations. Meanwhile, Tadros values Bow Truss at $13.8 million, based on monthly sales of nearly $500,000. (He says he's raised $1.5 million for the coffee company so far.) CROWDFUNDING Through a new crowdfunding portal called Funded Foods, Tadros in late June began soliciting investments from all comers, not just so-called accredited investors (those with an annual income of at least $200,000 or a net worth of at least $1 million). The portal, made legal under a new Illinois law that allows companies to raise up to $4 million per year online, will be used to fund both Tadros ventures and other, unrelated food ventures. ‘Tadros says he's trying crowdfunding because it's a way “for us entrepreneurs to get reasonable debt early on from our fans” without giving up too much equity in their companies. On top of that, he says, he gets emails all the time from customers who want to invest in his companies.‘Tadros is convinced that his latest projects—Bow Truss, Budiong and Aquanaut—are poised to hit. “Bow Truss has a chance to be our biggest success,” he says. “(We) need more money and time.” Of the approximately two dozen companies Tadros has owned since 2000, however, just seven have paid back his initial investments and produced returns for him, he says. And only two of those—an Evanston wireless retailer he sold a decade ago and Doejo—have produced returns so far for other investors. Tadros acknowledges that investing in him is a risk and notes that 90 percent of startups fail. Though he says he believes his new ventures are a “safe bet,” he doesn't want money from people who “don't understand gambling.” ‘As some of his ventures have proved, more often than not, those bets don't pay off. Columbia College More + THE GODFREYLogin 132Comments Crain's Chicago Business © Recommend 29 & Share Sort by Best jessica 9 months ago | read this article twice and all these comments and it saddens me. | never like to see someone go down like this publicly. Sometimes it's always good to get two sides to the story, but for this instance | have to say ... Phil is getting what he deserves. | used to work for him a while ago and | would watch him lie and lie again. | remember graduating college with hopes and aspirations to do good for people, but watching him and how he lied to people just made me so sad. | remember once a potential business partner came in the office for a meeting, and | could over hear him say to another colleague, " this will be like taking candy from a baby" | wish he just did right by people, but instead he used his energy to lie cheat and steal. | couldn't take it anymore and had to quit the company because of all the things | saw and witnessed. To those that are still at any of his companies or partners at any of his brands, | challenge you to really think if it's worth staying and working with him when there are plenty of companies and people who actually do good. 18 ~ « Reply » Share» Rafa - 9 months ago Phil, maybe your next investment should be in a PR director who can tell you when to stop arguing with commenters on the internet. Your every denial and ad hominem attack makes you look guiltier and less professional. 12“ ~ © Reply - Share> Cheap & Nothing Wasted > Rafa - 9 months agoYours is probably the best advice Tadros could get, but he refuses to take it. | won't call him crooked, but he sure is a fool. And the reason he keeps asking who commenters are is simple, he wants to file libel suits against, foolishly thinking he'll make money off of them. 4“ ~ - Reply . Share> Dano Sulik > Cheap & Nothing Wasted - 9 months ago If that last point is true, he must never have heard of New York Times v.Sullivan or AP v, Walker, both precedents from the 1960s that still stand. So, yeah. 1A” Reply » Share> Cheap & Nothing Wasted > Dano Sullk - 8 months ago I noticed that almost all of Tadros's comments have been deleted, especially the ones where he demands to know who the commenter are. I'm guessing someone wised him him, probably a lawyer. And most people have never heard of New York Times v.Sullivan or AP v. Walker & fools like Tadros think they can bully people. I'm betting he'll vote for Trump, because Trump says he'll change the libel laws instantly! a v Reply - Share» ice8 +> Cheap & Nothing Wasted ° 7 months ago “The existence of actual malice may be shown in many ways. As a general rule, any competent evidence, either direct or circumstantial, can be resorted to, and all the relevant circumstances surrounding the transaction may be shown, provided they are not too remote, including threats, prior or subsequent defamations, subsequent statements of the defendant, circumstances indicating the existence of rivalry, ill will, or hostility between the parties, facts tending to show a reckless disregard of the plaintiff's rights..." | don't know anyone involved here, personally. My impression is not positive. But if there were indeed associations between the author and a business rival or personal enemy motivating this piece, and if it could be proven, then that would appear to meet the legal standard for “actual malice" as pertains to libel suits involving a public figure. Limits do still exist. Reply . Share: Dano Sulik 4 Cheap & Nothing Wasted - 9 months ago | agree with all of that (and Trump being a bully and a fool probably goes without saying by now). 1m - Reply . Share»LM > Rafa - 9 months ago Well, looks like he had one at one point... ia v © Reply - Share> ‘This comment was deleted, Hubert Jass > Guest - 9 months ago whether its true or not, this amateur damage control where youre pouring your own time into fielding internet comments from randoms instead of just focusing on your businesses is a majorly bad look. if this is an unfounded tabloid smear piece then why are you devoting time trying to disarm it? you never see Leo or Angelina replying to comments on TMZ....your legal team is probably facepalm- ing right now. 5A ~~ Reply . Share> Mare Finour - 9 months ago Itis about time this came out. Everybody needs to know the truth about this man. He ruins everything he touches. His entire life is a fake empire. He is the biggest professional money gambler and back stabber. Nothing about this is surprising and its good for everyone to know the truth. oe v - Reply - Share> Jc Momma 9 months ago Tadros is a scammer and his entrepeneurship of the last 10 years or so is nothing but a lowball ponzi scheme to fund his wanna be celebrity status. Want to know where his investors money has been diverted?? To paying for his $1000 a month Lincoln Park pad, his wife's private photographers and make up artists, their private dinners with five figure catering bills, the AMG benz and on and on. He and his even more egocentric gold digging wife are both criminals. Did she possibly thinking her idiot husband who can barely put 3 sentences together and speaks fluent gibberish earned that type of living legitimately? This is the tip of iceberg. Wait till the IRS comes knocking on his door. Maybe if you were not an idiot posting shit to Instagram and Facebook all day long bragging about how you and your wife are lavishly blowing other people's money, the fallout wouldnt be so bad, You are going down and deserve it, Reply | Share»Blank > Guest » 9 months ago Waste of a post. He had it coming. 2A v— Reply. Share» Joseph + Blank : 9 months ago e-thug needs to make himself feel better by bringing down other people. 2A» - Reply - Share> sundevilpeg31 > Guest - 9 months ago The business ethics and the "ways of life" go hand in hand, though. And blowing through investor funding for personal baubles should offend everyone, including the IRS. 1A ~~ Reply - Share> Joseph > Jo Momma : 8 months ago Jo Mamma is an internet tough guy. Clearly he "thinks" he knows everything about other people and their celebrity status. Furthermore, he probably has never established anything worth mentioning and therefore has to hide underneath the alias Jo Momma. ~ v » Reply - Share > Rafa “> Joseph - 9 months ago Is that you, Phil? 20 ©. Reply . Share> Guy Fuller 9 months ago The comments in this article may very well be accurate down to the last detail, which is why | would like to see Mr, Tadros response to this. As thin as the pancake may be, there is always another side. With that said, there are a number of Chicago serial entrepreneurs who have grounded a number of businesses after securing finances, | am curious as to how this Tadros person made the most wanted list. The article borders on criminal activity by Tadros. We've heard from the prosecution, defense team - you're up. BA - Reply - Share> Michael Chicago - 9 months ago Phil Tadrros is a fraud and I'm shocked he's not in jail yet. He has swindled millions of dollars and it's only time that he will be behind bars. | know first hand from people who have workedfor him that he wires money into his personal accounts all the time. If you are a potential investor reading this be forewam. If you are a current investor | urge you to demand access to records and financials of your "investment" 8A v . Reply . Shares Barry 9 months ago Phil Tadros is by far the most dishonest and shady person | have ever had the opportunity of knowing. He is as slimy as they come. | feel sorry the people that work for him. This article should be a great deterrent for anyone who ever thinks about doing business with him in the first place. What a horrible person. | wonder if his wife is involved in his criminal activity as well. ~~ Reply . Share This comment was deleted, Barry > Guest - 9 months ago Mr. Tadros | will not play your game. It's a shame it took this long for it to get out on how you steal from people. People who continue to do business with you should do so knowing they will either lose their money and those that continue working for you will be probably later be investigated for being a part of Chicago's silliest Ponzi scheme. Shame on you for continuing to pretend to be someone you aren't. You are a criminal sir. 5 v- Reply. Share» Michel - @ months ago He is a manipulator extraordinaire unlike any I've ever witnessed. Anyone foolish enough to give him $$$$$ is uneducated. How can he have anyone's best interest when he doesn't even know how to manage life. To be a business man is to choose partners wisely and execute he doesn't know how to pick business partners or domestic partners he buys their attention. The below comments solidify all of this from business to home he doesn't know what he's doing. Just the beginning of your true exposure to Chicago. You buy peoples affection good luck with picking better Partners and a Domestic Partner that do not back stab you without your knowledge. 7 v~ Reply . Share» sundevilpeg31 | 9 months ago Amazingly, all of Mr. Tadros's comments have vanished! Imagine that. 7A © © Reply » Share» Going on strike or something > sundevilpeg31 - 9 months ago dang, | just made a bow! of popcorn and was looking forward to reading his comments! @ Av © Reply . Share»Gricket + sundevilpeg1 \ 9 months ago Not exactly! htips://www.scribd.com/docu... 2 v Reply. Share > James > Cricket : 9 months ago That's why anonymity is so important. Because Phil Tadros can't be in the limelight without taking it personal. If he wants to be big and famous and a Chicago hotshot then he needs to keep his dumb ass off the comment sections of these articles. “~~ Reply » Share» dames > Cricket - 9 months ago This is invaluable. | bet if he knew who everyone was he would call their boss and offer them money to get them fired. I've heard stories, it's been done before. I'm good friends with a guy who that exact scenario happened to. Bottom line is Phil is a sleazy guy, I'll choose not to. support him as should anybody who cares about the wellbeing of people. “~~ © Reply « Share» lifesapicnic - 9 months ago Bowtruss coffee is a ripoff and poor quality. I'd rather spend my money on coffee shops with better product like Wormhole, Gaslight, Caffe Streets, eto. 7“ + © Reply - Share» PP Chicago 9 months ago Thad the displeasure of working with Phil through his Doejo company many many years ago. It wes a bad experience. He always left me feeling like I needed to shower after every interaction. Fast talker, loose with words and promises, etc. | can't speak to the investor side, but if my dealings with him were an indication of his broader business M.O....... can't say anything in this article comes as shocking, It's one thing to try and be an entrepreneur and fail sometimes, it's another to, in Phil's own words, "gamble" with other people's money. Gambling is what you do at a casino. Seems like Phil epitomizes the moral hazard problem or he may just be a careless unsophisticated hack who is just a good enough sales person to "trick" investors into giving him money. There are lots of these types of guys out there. Eventually their luck runs out. 7A». Reply - Share» ment was deleted. PP Chicago Guest - 9 months ago You keep asking everyone who comments, “who they are'...like that matters. |mean | get it, you Want to go one at a time to aaaress eacn or tnem, so you can likely deflect responsibility, rationalize your actions/inactions, or just sate your own curiosity on who is speaking negativey. Unfortunately, | think you are missing the point. This article isn't about me or them, it's about you. It's not one or two or three or even four people, but apparently a dozen or more, at least, just from the comments here to the named people in the article, who have had negative business experiences with you. I'm sure some are bullshit or unfair, while others aren't, I'm sure there are a few who could sing your praises. | just don't see any of those people here, make of that what you will. | wrote a fair, if slightly harsh comment based on my own experience. My name isn't important. | don't owe you anything. Which is more then I can say for you and some of your previous investors, suppliers, and contractors whom you seem to owe or settled with. | replied again, because it's fascinating to me how you are choosing to lash out externally instead of taking any real responsibility or a professional stance. No more responses. | wasted enough of my time. You want to have a fair exchange? Write your own rebuttal and post it somewhere or see if Crains will post it. Best of luck. 6~ ~ © Reply - Share» ken001 9 months ago The guy is a player, it's how he operates. Shame on those who invest without the diligence to know who they are investing in, He's no Madoff. 6 Reply . Share» Cricket - 9 months ago Cricket to the rescue. BLS- just buy me a cup of joe at intelligentsia. [#boycottbowtruss] Follow link to the Tadros rants from earlier: https://www.scribd.com/docu... 6 ~ ~ Reply Share> Michael Chicago 9 months ago Poor Phil Tadros. Looks like his luck finally has run out. 6~ ~ - Reply - Share> James 9 months ago Phil Tadros is a crook and a con. | know for a fact that he pays all of his employees just over minimum wage. These aren't just people taking orders, these are trained professionals who aren't even making ends meet working for this man full time. Bowtruss is a copy cat founded on the coat-tails of where intelligentsia left off. He's simply riding the path that was paved before him by those who FOUNDED the 4th wave of coffee in the city of Chicago. Phil is a meager man with an appetite for confrontation and destruction. This is why he has heen suinrasefill hacatise there's nathina that he's NOT willinn ta da He's evan haan known tostoop so low as to personally seek out those who have defamed him on social media (social media, yes, a platform for ones own personal opinions) and have them professionally humiliated and scolded because his feelings were hurt. Bottom line is that Phil Tadros is a man who has never been told 'no'. He doesn't know anything about web design, coffee (considering that he wanted bowtruss k-cups), or beer. He's just been gifted the money enough (well maybe) to buy those who do, at a bargain | might add. I'm glad someone is finally telling this entitled baby ‘no’. 5 ~ . Reply . Share» ProtTheGOAT ~ James © 9 months ago I know nothing about this man, but you calling him a crook and then saying he's abiding by illinois and chicago law is very dumb. Also, the people who founded the 4th wave of coffee in chicago rode the coat-tails of those before them. Theres not a ton of originality out there. ta Reply | Share> dames “> ProtTheGOAT - 9 months ago You admitting you know nothing about him and then proceeding to comment is very dumb, ” v © Reply - Share» ProtTheGOAT > James - 8 months ago Your first statement is libel if it cannot be proven true. That is dumb. Am» Reply. Share» James “> ProtTheGOAT : 9 months ago What's dumb is that you are completely neglecting the fact of ethics in this argument. It's unethical what this man does, but since he hasn't broken any laws then it's ok. You sound just like a lawyer. Perhaps you support stores with child labor practices? Maybe you don't support fair trade coffee? No laws are being broken therefore everyone must be ok. rm . Reply Share» ProtTheGOAT > James - 9 months ago Dude, he probably sucks. And no, its not ok to have shitty ethics. | was just being cunty with your verbage. Honest question, what companies are you referring to? EDIT: And I'm mad that my PokemonGo keeps crashing ~ = Reply . Share»James * ProtTheGOAT months ago Meh, you're fine. Mine was crashing a boatload yesterday. 'm referring to mostly bowtruss. Phil had warned all his employees to "be on the lookout for a scathing article" that was full of ‘lies and false information". Which is fine, but then why go this far to defend his stance? I know people who work/have worked there. He is always mismanaging money, he accepts payment from people in form of tennis balls, doesn't pay his employees very much at all. Which are all things that are his choice, and aren't inherently wrong, but just aren't good business practice. Not to mention they have one of the highest employee turnover rates in coffee. Also need we mention the Beverly Hills ‘walkout! where the ENTIRE staff of the store quit and named "upper management" as ‘their problem. There's a long list. He's a guy who has money and bought his way into the three most popular trends among adults right now; the internet (dogjo), beer (aquanaut), and craft coffee (bowtruss). Yet he continues to know nothing about any of those things, he simply stands on the shoulders of his amazing staff yet he reaps all the benefits. ost a ne Be weaves Seer er CRAIN'S yw f y Company Connect jn i UniversityAdvertise Privacy Policy - Terms of Service Copyright © 2017 Crain Communication, Inc. Geka | al It already writes reports. Next it could help read them to you. =n Crain's annual ranking of privately held companies is growing, and so are top lines