One of the country’s largest accounting firms has become entangled in the long-running legal battle between investors in a popular restaurant in Chicago, court documents show.
Estranged stakeholders in Maple & Ash — a Gold Coast steakhouse that’s the highest-grossing restaurant in the city — are asking a Cook County judge to enforce a subpoena against the Plante Moran accounting firm for documents stemming from the firm’s work for the restaurant.
Last year, the plaintiffs in the case alleged they found “smoking gun” proof that Maple & Ash’s founders engaged in “rampant misappropriation” of federal pandemic relief funds, diverting millions of dollars into their accounts.
The defendants deny accusations that they funneled federal Paycheck Protection Program funds away from the restaurant for personal use, including more than $2 million toward the purchase of a private jet in 2021.
Public records show the Chicago and Scottsdale, Ariz., locations of Maple & Ash received a total of about $7.6 million in PPP funds from the U.S. Small Business Administration to cover payroll costs during the coronavirus pandemic, and those loans have been forgiven.
Now, the estranged investors in the restaurant say Plante Moran has “flatly refused” to cooperate with their subpoena issued six months ago, even though the accountants from the firm were “intimately involved” in advising Maple & Ash’s management “on how much or little to disclose to investors and when,” according to court records unsealed recently after WBEZ and the Chicago Sun-Times petitioned for that.
Plante Moran is not a party to the case. A spokeswoman for the firm, which is headquartered in Michigan, declined to comment, saying, “We’re unable to answer questions on this topic as the firm has a long-standing practice not to discuss client matters.” (Disclosure: Plante Moran also has worked for Chicago Public Media, the parent organization of WBEZ and the Chicago Sun-Times).
To support their arguments that Plante Moran should be forced to comply with their subpoena, lawyers for the plaintiffs have cited a series of documents obtained from Maple & Ash in discovery in the case, including emails between the accounting firm and the defendants.
According to the newly unsealed court records, Plante Moran advised the managers of Maple & Ash “on their handling of PPP funds.”
In their court filing, the plaintiffs say Plante Moran “quizzed” the chief financial officer for the restaurant “about their accounting treatment, and disclosure to the investors, regarding the PPP funds” in one email exchange a couple years ago.
The restaurant’s CFO, Wadeh Constance, corresponded with Plante Moran’s John Barsella in January 2022 about how to account for the PPP funding. In one email entered into the court file, Constance told Barsella, “Since virtually no PPP $ was sent to the restaurant I didn’t want to show the income until after we close this year as investors/owners will think there is distributable cash.”
The newly unsealed records also point out that Constance and Barsella discussed concerns about the PPP spending that were raised by David Pisor, a former co-owner of Maple & Ash. The plaintiffs say Pisor “asked about the propriety of the Defendants’ treatment of PPP funds,” and Barsella worked with Constance to respond to Pisor.
According to the plaintiff’s filing, the chief financial officer for the restaurant allegedly told the accounting firm that Pisor was “out playing Inspector Gadget” and should be reminded he was part of the entity that received all the PPP funds, “meaning he is complicit in any wrongdoing … Moron.”
Barsella responded, “Yeah, that’s what I told him,” according to the newly unsealed court filing from the plaintiffs.
Pisor declined to comment this week.
Pisor and fellow Maple & Ash co-founder James Lasky have settled a separate legal fight between them, and Pisor told WBEZ last year that he was no longer involved with the restaurant and has no part in any pending litigation. Pisor has said he did not sign documents for the PPP loans or handle the finances for that issue because he was recovering at a substance abuse clinic at the time.
Lawyers for the plaintiffs and for Maple & Ash also declined to comment on the newly unsealed filing. But the attorneys for the restaurant said in a statement, “Maple & Ash provided the Plaintiffs with all its corporate financial records that show that the PPP funds were appropriately used and subsequently forgiven. Ultimately, Maple & Ash is confident that after a trial it will be found to be ‘Not Liable’ for the allegations made by the Plaintiffs.”
The lawyers for the plaintiff filed the motion on March 20 asking the judge in the case, Alison Conlon, to enforce the subpoena against Plante Moran, saying “repeated efforts” to obtain compliance had yielded no documents from the accounting firm.
But much of that court filing was under seal initially, and Steve Mandell, an attorney representing WBEZ and the Sun-Times, appeared before Conlon at the Daley Center courthouse on April 2 and argued in favor of making the entire document public.
A lawyer for Maple & Ash told Conlon the emails between the chief financial officer and the accountant at Plante Moran represented “sensitive financial information and it shouldn’t end up in the newspaper like some other things in the case,” according to a transcript from the April 2 court hearing.
Mandell countered that the public has a “right to know” what happens in court cases and that “there’s a presumption of access with the exception of only the most limited circumstances.”
Nine days later, Conlon issued an order siding with WBEZ and the Sun-Times. Last year, Conlon similarly ordered a seal to be lifted on other previously secret filings in the case.
Dan Mihalopoulos is an investigative reporter on WBEZ’s Government & Politics Team.
