Restaurant group in $4.1 million legal stoush with ad guru

The Urban Purveyor Group of restaurants and bars is embroiled in a legal battle in the NSW Supreme Court with advertising guru Ian Elliot, who claims the group owes him $4.1 million.

Urban Purveyor Group is made up of 15 restaurants and bars including the Sake chain of restaurants and bars and the Bavarian Bier Cafés. It is headed by John Szangolies.

Elliot is a board member of the NRL and is the former chairman of advertising agency George Patterson. Between 2002 and 2008, Elliot was a consultant for Urban Purveyor Group.

Elliot agreed to be paid 10% of the increase in value of the business while he worked for the group, which was actually a massive growth period, seeing a jump in value from $5 million in 2002 to an estimated $49 million at the end of 2008.

The dispute centres on the valuation of the business at the end of 2008 and whether all incomes and expenses were declared.

Elliot is claiming Urban Purveyor Group under-declared its sales revenues and alleges Szangolies used cash from his restaurants to pay for nannies for his children, holidays and home renovations.

He also alleges Urban Purveyor Group diverted cash revenues to Szangolies and misallocated expenses to decrease the business’ value.

In a statement sent to SmartCompany, Urban Purveyor Group said the allegations made against it in the Supreme Court proceedings “are without merit or foundation”.

The Urban Purveyor Group said the matter has been pending before the court for some years.

“The matter essentially relates to principles of valuation. Those valuation issues have been referred by the court for expert determination,” the group’s statement said.

“To date, the expert referee has been unable to identify any evidence to support the revenue allegations made by Minibrook [Elliot’s company].

“The Urban Purveyor Group is of the view that it is inappropriate to discuss the matter further whilst it remains pending before the court.”

The case returns to court on October 19.

SmartCompany contacted Elliot who declined to comment.