New lawsuit provides an inside look at the financial decisions at Houston’s in-demand brand Turkey Leg Hut

Outside view of Turkey Leg Hut on Nov. 22, 2019. (KPRC, KPRC 2)

HOUSTON – A legal battle is stirring between owners of the Turkey Leg Hut & Company, the parent company of Houston’s popular eatery on Almeda Road in Houston.

Business owner Steven Rogers is suing Nakia Price, the majority owner of the TLH Company, claiming breach of fiduciary duty and self-dealing, fraud and conspiracy to commit fraud. Rogers is seeking at least $100,000 in damages.

In the countersuit, Price denied all allegations set by Rogers and seeks injunctive relief. She said Rogers’ suit follows weeks of “heated negotiations” for a buyout of his interest in the company. She said the lawsuit is a “desperate move to squeeze money out.”

Price also laid out Rogers’ missteps, which Price said included embezzlement, stealing money and equipment, and tarnishing Turkey Leg Hut’s good standing under its rental agreement. She filed a counterclaim for $100,000.

This is not the first time the TLH company has come under fire. In November 2019, neighbors claimed the restaurant operated illegally and was a public nuisance due to smoke.

Rogers’ claim

In August 2017, Rogers and Price decided to open a new location for Turkey Leg Hut on Almeda Road, according to legal documents. Previously, Price ran a TLH location on Washington Avenue.

But due to personal issues, the business was failing. Rogers said he and a few other investors put in thousands of dollars to reinvigorate the brand. Rogers said Price put in $500 plus “sweat equity” for the new location.

At that time, Price had majority control of the TLH Company, followed by Rogers at 15%. The other investors -- Mojeed Martins, Carl Moore and Jonathan Reitzell -- each owned 10%.

The new TLH location opened in December 2017.

Four months later, Price said she purchased the membership interests of Martins and Reitzell, which shifted the interests of the remaining investors. Price received 68.75% of the TLH Company, while Rogers had 18.75% and Moore netted 12.5%.

However, in the lawsuit, Rogers calculated his ownership at 29%.

Even more, Rogers claimed that the shareholders “rarely receive dividends, and if they do, they are not equal to their percentage of ownership.”

“The business was and continues to be profitable,” according to legal documents. “So profitable that the defendant and her husband pay themselves $6,000 per week through the majority of the company’s existence.”

Here is the lawsuit filed by Rogers:

TLH food trucks

As a jammed packed establishment in the pre-COVID world, the TLH food trucks serve as a traffic diversion to reduce wait times at the restaurant. However, this is a major point of contention for ownership.

Rogers argued Price and her husband, Lynn Price, diverted funds, customers and supplies from the restaurant to the food trucks and other personal businesses. While he receives a “zero monetary stake” from these businesses, Rogers said the new businesses are directly and indirectly benefiting from the TLH association.

“The food trucks are covered in Turkey Leg Hut advertisements and are easily confused as being associated with Turkey Leg Hut & Company,” the lawsuit read.

In December 2019, Price created TLH Concessions to operate the TLH food trucks and catering business, per the lawsuit. There are several TLH food trucks across Houston, including a truck near the flagship location.

Rogers claimed Price is taking all the proceeds from the food trucks for herself while using food, equipment, labor and other resources paid for by the TLH Company. He estimated that she raked in more than $1 million over the past 24 months.

Nearly a month ago, Rogers said Price made a “cash call” seeking funds due to the financial strain coronavirus had caused on the TLH restaurant. Yet, the restaurant made $1.15 million in net sales that month, per court documents.

Rogers said Price was using money from the TLH Company to “fund her personal projects, which is causing the financial strain alleged in the cash call.”

Pushing back on claims

Price responded to the allegations with her own list of inappropriate actions by Rogers, including authorizing a merchant agreement that cost the company $40,000 in bank fees.

According to court documents, Rogers took a point-of-sale system valued at $27,000 from the restaurant and installed it at Bar 5015, which he owns along with Prospect Park in Houston.

On June 12, Bar 5015 exploded due to arson. A video showed four individuals dousing a fire accelerator all over the establishment. The POS system was destroyed in the fire.

Price also said Rogers purchased Scrappy Brown LLC without investigating the financial condition of the company. Without proper due diligence, the TLH company inherited $275,000 in debt.

“Rogers knew that he was not authorized to enter into the transition, but he acted on behalf of TLH anyway and made the purchase,” according to the countersuit. “On information and belief, Rogers derived a personal benefit and.or benefit to his other business vendors by causing TLH to purchase Scrappy Brown LLC.”

Although not involved in the day-to-day operations of the restaurant, Rogers is a signatory and has access to almost all financial and operating accounts of TLH.

“TLH is in danger of immediate theft or loss of its money and property by Rogers, which are critical to the continued operation of TLH,” according to the countersuit.

Here is the countersuit filed by Price:

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