EGP Louisiana LLC has taken legal action against TACI Investments, Inc., accusing the latter of breaching an Asset Purchase Agreement related to the sale of six fast-food franchised restaurants. The complaint was filed in the United States District Court for the Eastern District of Louisiana on December 3, 2024. EGP Louisiana alleges that TACI Investments failed to disclose critical information during the due diligence period, which led to significant financial losses for EGP.
The roots of this case trace back to August 27, 2021, when EGP Brands LLC initially entered into an Asset Purchase Agreement with TACI Investments for the acquisition of five KFC-branded and one KFC/Taco Bell-branded restaurant in Louisiana. This agreement was later assigned to EGP Louisiana LLC. However, according to EGP Louisiana, TACI Investments did not fulfill its obligations under the agreement. The plaintiff claims that TACI misrepresented and withheld crucial information about the physical condition of the restaurants and failed to disclose substantial increases in Costs of Goods Sold (COGS) for 2022. These omissions allegedly occurred despite TACI's awareness and access to detailed reports forecasting these increases.
EGP Louisiana asserts that they were misled by TACI's actions, resulting in overpayment and loss of business value among other damages. The complaint highlights several instances where EGP requested financial documents and site tours during the due diligence period but received incomplete or misleading responses from TACI. Furthermore, it is alleged that after closing on March 16, 2022, it became evident that there were significant maintenance issues with the properties which had been concealed by TACI.
In response to these grievances, EGP Louisiana is seeking rescission or cancellation of all agreements related to this transaction and a return of their $3.98 million purchase price. Additionally, they demand compensation for damages exceeding $75,000 due to breach of contract, fraud in inducement, negligent misrepresentation, unjust enrichment, breach of fiduciary duty, and unfair trade practices under Delaware and Louisiana laws.
Representing EGP Louisiana are attorneys Stephen K. Conroy and Amanda D. Hogue from Chehardy Sherman Williams Recile & Hayes LLP based in Metairie, Louisiana. The case has been assigned Case ID: 2:24-cv-02788 in front of a magistrate judge at the Eastern District Court of Louisiana.