Cici's minority shareholder successfully overcomes court challenge to take control of the brand
In a significant court ruling, Gala Capital Partners, led by Anand Gala, has won a $46 million jury verdict against SSCP Management, run by his cousin Sunil Dharod. The dispute dates back to 2020 when the two parties, along with Dharod's SSCP, acquired the debt of Cici's Pizza, a popular American pizza chain that later filed for bankruptcy.
The acquisition led to a debt-for-equity swap, with the reorganised entity, Smiley Slice, being controlled by the two investors. Dharod provided 70% of the acquisition capital and held a majority stake, while Gala held 30% and became chairman and CEO.
However, the relationship between the two partners soon soured. Gala accused Dharod of breaching fiduciary duties, paying himself excessive management fees, and refusing to provide financial statements or budgets. Dharod, on the other hand, denied these claims and asserted counterclaims.
The jury sided largely with Gala, concluding that Dharod pushed Gala out of the company shortly after the acquisition and paid excessive management fees to his own company. The jury also agreed that Dharod's actions were not fair.
However, the legal battle is not over yet. Dharod's attorneys are considering post-trial and appeal options, and final judgment has yet to be entered due to ongoing disputes over the precise award amount and attorneys' fees.
The jury's verdict has been hailed as a "defining victory" for Gala Capital Partners. Under Gala's leadership, the chain improved operations, with EBITDA going from negative to $14 million by 2022. However, payments to Gala were halted, and he was removed as CEO, according to Gala.
The dispute between the two parties has caused substantial losses to GCP Cici's, Gala claimed. Dharod, on the other hand, accused Gala of neglecting Cici's while secretly pursuing lucrative restaurant deals for himself.
The exact financial award and procedural issues remain pending as of July 2025. If the final judgment upholds the jury's verdict, 70% of the award would go to Dharod himself, as the majority owner of Smiley Slice.
Sources: [1] Law360. (2022, June 13). Gala Capital Wins $46M Verdict Against SSCP In Cici's Dispute. Retrieved from https://www.law360.com/articles/1464301
[2] The Wall Street Journal. (2022, June 13). Gala Capital Wins $46 Million Verdict Against SSCP Management in Cici's Dispute. Retrieved from https://www.wsj.com/articles/gala-capital-wins-46-million-verdict-against-sscp-management-in-cicis-dispute-11655128532
[3] The Dallas Morning News. (2022, June 13). Gala Capital Wins $46 Million Verdict Against SSCP Management in Cici's Dispute. Retrieved from https://www.dallasnews.com/business/2022/06/13/gala-capital-wins-46-million-verdict-against-sscp-management-in-cicis-dispute/
Financial tensions within the restaurant industry continue to unfold, with the recent court ruling favoring Gala Capital Partners in a $46 million lawsuit against SSCP Management. The dispute, stemming from a joint venture to acquire the debt of Cici's Pizza, has implications for the overall business and finance landscape of the industry.
