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7 Brew & Jimmy John Liautaud Reach SettlementLock Icon

2 min read

The once-escalating court battle between 7 Brew Coffee Co. of Fayetteville and Jimmy John Liautaud, the billionaire founder of the Jimmy John’s restaurants, over ownership of the fast-growing coffee shop chain has been settled.

The parties to the original lawsuit and to a counterclaim filed a joint motion March 20 in Benton County Circuit Court to dismiss the entire case with prejudice, meaning it can’t be refiled. Circuit Judge Christine Horwart dismissed the case one day later.

The settlement came five weeks after investment management firm Blackstone Inc. of New York announced it had bought a stake in 7 Brew from Liautaud for an undisclosed amount.

Liautaud and 7 Brew CEO John Davidson were both quoted in Blackstone’s news release on the transaction. Blackstone said it was making the investment to enable 7 Brew to speed up its expansion.

Ownership in Dispute

The legal fight began with a lawsuit filed Jan. 13, 2023, in Benton County Circuit Court by Stillwater Brew LLC, a Delaware company of which Liautaud is a principal. Stillwater sued Drink House Holdings LLC, the parent company of 7 Brew Coffee, and Bar 7 Bar LLC, the manager of 7 Brew. Both Drink House and Bar 7 Bar are based in Wyoming.

Stillwater’s original complaint said it was a member of Drink House Holdings and that Bar 7 Bar had failed to respond to multiple requests by Stillwater to review the company’s books.

Then it really got ugly. Drink House and Bar 7 Bar claimed that not only had Stillwater been given the opportunity to review the company’s books, but disputed Stillwater’s ownership interest in the company and even alleged that they had been “fraudulently induced” into a contract with Stillwater.

A counterclaim ensued, followed by an attempt at mediation and a claim that 7 Brew CEO Davidson and Chairman Ryan Fowler had tried “to strip Stillwater’s equity in Drink House for their own gain” and “cut Stillwater out of the rewards to be reaped from Stillwater’s hard work.” All of which Davidson, Fowler, Drink House and B7B denied while accusing Liautaud and Stillwater of fraud.

Valentine’s Day brought the announcement of the Blackstone purchase. The subsequent motion to dismiss revealed that the parties had reached a settlement on all claims, including paying their own attorneys.

Marshall Ney and Alexa Mizer of the Rogers office of the Friday Eldredge & Clark law firm represented the 7 Brew interests. Todd Lewis of Conner & Winters of Fayetteville and Sean Berkowitz and Garrett Long of Latham & Watkins of Chicago represented Liautaud.

Meanwhile, 7 Brew Coffee has grown to 214 stores open in at least 24 states.

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