Boston Market ordered to pay $11.9 million to US Foods in default judgment decisionBoston Market ordered to pay $11.9 million to US Foods in default judgment decision

A U.S. District Court judge has granted food supplier US Foods default judgment in its July lawsuit against Boston Market for unpaid bills, starting in 2022. Although Judge Manish Shah explained that default judgment is a “harsh sanction,” in this case both the court and plaintiffs had no choice because Boston Market had “intentionally dodged their obligations to the court” in a display of “bad faith to avoid this case.”

“The amount sought in damages is a large sum, but for a company with a national brand identity, it is not disproportionate to the willful disregard defendants have shown for this litigation,” Judge Shah said in his summary motion. “Since November, defendants have complied with the court’s scheduling orders, but that is too little, too late….Defendant Pandya’s short-lived detour through bankruptcy court looks to be another delay tactic and a sign that he has no interest in genuinely participating in this litigation.”

US Foods’ $11.3 million lawsuit was the most high-profile and expensive lawsuit among the many filed against Boston Market over the past couple of years. According to the lawsuit, Boston Market “began to fall significantly behind in its payment obligations to US Foods” beginning in 2022 and secured a promissory note-based payment schedule from the struggling restaurant chain. However, US Foods claims that Boston Market still failed to keep up with the agreed payment schedule and as such, owed the company $10.5 million in accrued debt, as well as $800,000 in interest.

Related:A closer look at Boston Market’s slow death

According to the summary judgment motion, Boston Market owner, Jay Pandya, did not acknowledge the July lawsuit until September, when his attorney claimed that his client would respond to the complaint by Oct. 9. Pandya and his attorney did not respond by Oct. 9 as promised, and US Foods submitted a motion for entry of default judgment, requiring Pandya’s response to the complaint by December—a schedule with which he finally complied.

In December, two days after the deadline for the default summary judgment response, Pandya filed for personal bankruptcy with the Eastern District of Pennsylvania Bankruptcy Court, citing $10-$50 million in liabilities and the same range for assets in his bankruptcy paperwork. The bankruptcy case was dismissed in January by a U.S. bankruptcy trustee because Pandya had not provided insurance information on two properties he owned and was not responding to repeated requests for more information over the course of two weeks.

Since US Foods was awarded its default judgment win earlier this week, the company has submitted a statement of additional fees and interest, claiming that over the span of five counts of judgment against Boston Market, the plaintiff is actually owed somewhere in the ballpark of $30.7 million, including the debt principal, accrued interest, late fees, and attorneys’ costs and expenses.

Pandya is named in most of the lawsuits against Boston Market as head of Engage Brands under the Rohan Group of Companies, which bought Boston Market in 2020 while the then-struggling company was in the midst of a brand transformation that was meant to boost sales and bring Boston Market out of the red. Since then, Rohan Group’s time of ownership has been marred by hundreds of lawsuits, store closures, and a steep downward trajectory for Boston Market’s revenue and reputation.  

Contact Joanna at [email protected]