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Dispute over cheesecake company ownership sparks lawsuit

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Suzy's Cream Cheesecakes sold approximately 830,000 cheesecakes during the first half of 2011 and the company is planning to make an $8 million expansion that would double the bakery's work force, the Milwaukee Journal Sentinel reports.

Founders Susan and Mark Strothmann own 1,000 shares of Suzy's Cream Cheesecakes, which is approximately two-thirds of the company, but silent partner Alex Costigan has filed a complaint claiming he's owed a 46 percent share of the company.

According to Costigan's complaint, he agreed to pay $1.7 million and a nickel per cheesecake sold over the next five years to the Strothmanns in exchange for 700 shares, or 46 percent of the company.

"He provided guarantees for the financing, and as a result of that he wanted a bigger ownership position," Chris Banaszak, Costigan's lawyer told the paper. "He didn't want to be on the hook for millions of dollars without having control of the company."

If the Strothmanns are found in breach of their contract with Costigan, general liability insurance would help cover any legal fees as a result of management errors.
 

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