Frank Bonanno sued by former partner over profits from two cocktail lounges

A former partner of Frank Bonanno is suing the local restaurateur, alleging that he’s not been paid properly for his shares in the Green Russell and Vesper Lounge.

Adam Hodak, Bonanno Concepts’ former beverage director, filed a lawsuit against Bonanno and his wife Jacqueline on Jan 18.

Bonanno Concepts owns 10 brands, including Luca and Mizuna in Cap Hill, plus Denver Milk Market downtown.

“We wish Adam nothing but the best,” the company said in a statement. “However, we dispute the allegations in his Complaint and will vigorously defend against them.”

Hodak’s attorney, Tony Nasser with Elevated Law, declined a request for comment.

According to the lawsuit, Hodak had a 15 percent interest in the Green Russell, Bonanno’s speakeasy in Larimer Square, and a 10 percent interest in Vesper Lounge, a Mediterranean cocktail lounge in Cap Hill.

According to the lawsuit, in early 2019, Hodak “became concerned about discrepancies between the tax forms and the actual distributions he received from Green Russell and Vesper Lounge.” He then asked to review the company books, the lawsuit claims.

Hodak claims he was given limited financial records for each company, comprising two years. The Bonannos would not provide complete copies of the companies’ books and records from 2010 to 2013, or 2020 tax returns, according to the lawsuit.

Bonanno Concepts charged Green Russell and Vesper Lounge approximately 4 percent to 6 percent of gross profits as a management fee, according to the lawsuit.

Hodak says he hired counsel to help him review the books and discovered the tax returns reflected significant underpayments of member distributions to Hodak compared to those paid to the Bonannos. He also found “disguised profits or distributions as expenses,” overpayments to Bonanno Concepts and other discrepancies, according to the lawsuit.

In August 2019, according to the lawsuit, Hodak met with Bonanno to discuss the findings, and Bonanno admitted that the tax reports misstated member distributions to Hodak, who ended up paying taxes on money he never received.

“Mr. Bonanno stated that Plaintiff should have been reimbursed…and also admitted to Plaintiff that he shifted money and expenses between various entities without accurately reflecting such transfers in the affected entities’ financial records,” the lawsuit reads.

After discovering these financial discrepancies, Hodak started planning to open his own bar. He said that when the Bonannos found out about this in February 2020, he was terminated from the restaurant group and the couple attempted to buy him out.

Hodak believes his stake in Green Russell is worth at least $285,000 and his stake in Vesper Lounge at least $99,000, according to the lawsuit.

The Bonannos, however, valued his stake in Vesper Lounge at $27,366, according to the lawsuit, which doesn’t specify their valuation for his Green Russell interest.

In January last year, Hodak went on to open The L, a cocktail bar at 46 N. Broadway.

Two months later, when 5280 wrote about The L, the magazine quoted Hodak saying: “I wouldn’t be here without Frank (Bonanno). But it feels great to be doing our own thing.”

He’s asking Denver District Court for a full and complete account of the Bonannos’ actions as managers of the Green Russell and Vesper Lounge for all the years Hodak was a partner, and for recovery of any balance found to be due.

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