The knives are out in a $100 million Manhattan family feud that threatens the future of the legendary Palm steakhouses from LA to New York.
The Palm’s story starts in 1926 when Italian immigrants Pio Bozzi and John Ganzi applied to open a restaurant on Second Avenue and 45th St. under the name of their hometown, “La Parma.”
“Because of a language difference it became The Palm and it’s been The Palm since 1926,” attorney Frederic Newman said in Manhattan Supreme Court Monday.
The botched name — and the costs of franchising it — are at the heart of a trial unfolding in Manhattan Supreme Court.
Newman represents two of founder John Ganzi’s grandkids — Garry Ganzi and his sister Claire Breen — in a suit against their cousin Walter Ganzi Jr. and his partner Bruce Bozzi Sr., Pio Bozzi’s grandson.
The siblings claim they were sliced out of profits from the company’s now 21 locations nationwide. They get a 20 percent stake, while the partners control the remaining 80 percent.
The partners pay an annual $6,000 licensing fee for each additional restaurant. The siblings’ lawyer, Frederic Newman, called that figure “nuts” and a product of “self-dealing.”
The eateries are nearly identical in décor and a menu that ranges from Italian classics like veal marsala to 36-ounce New York Strip steaks sliced table side and 3-pound Nova Scotia lobsters.
Ian Shapiro, who represents Walter Ganzi Jr. and Bruce Bozzi Sr. said in opening statements Monday that the siblings are hungry for money they didn’t earn.
The business partners’ own “energy, creativity and risk taking” was responsible for “transforming their family’s restaurant into a well-known national brand” Shapiro said.
Their grandfathers only ran the original steakhouse on Second Avenue in Manhattan. The partners opened the first offshoot at the urging of George H.W. Bush in 1972 in Washington, D.C. when he was President Nixon’s UN Ambassador.
Newman, countered that the success of the national franchises is owed to the “iconic New York steakhouse” opened by the grandfathers and closed two years ago.
There are still three Manhattan locations—one on Second Avenue across from the original, another in Midtown West and a third in Tribeca.
Newman is asking the judge to award his clients a 5 percent cut of the national restaurants’ profits.
That amount would destroy the company, Shapiro argued.
“The royalty they are seeking would exceed the restaurants’ average net income over many years,” Shapiro said.
A $100 million payment to the siblings would mean “catastrophic personal consequences” for his clients, Shapiro said.