Legal Feud Threatens Il Mulino Restaurant Group as Founder Sues Lenders
Jerry Katzoff, founder of the upscale Il Mulino Italian restaurant chain, has filed a lawsuit against his lenders, Benefit Street Partners (BSP), accusing them of orchestrating a scheme to remove him from the business. The lawsuit, filed in Manhattan state court, marks the latest escalation in a bitter dispute over a $35 million loan default that began last spring.
Katzoff alleges BSP fraudulently pressured him into signing a $10 million personal loan guarantee and misled him by promising pandemic-related leniency before unexpectedly demanding payments. He is seeking $50 million in damages, citing fraud and interference in his partnership with longtime managing partner Brian Galligan. Katzoff claims BSP sidelined Galligan from daily operations at Manhattan locations in an effort to devalue the business.
The suit also accuses BSP of installing its own executive, King Jang, as Il Mulino’s finance director, alleging he exploited his role by indulging in “thousands of dollars” worth of complimentary luxury meals and wines for himself and guests.
The ongoing conflict adds uncertainty to the future of the iconic chain, which counts celebrities and former presidents among its patrons. Though Katzoff previously placed seven of Il Mulino’s 16 locations—including those in Las Vegas, Miami, and the Hamptons—into Chapter 11 bankruptcy, New York City restaurants remain unaffected and all outlets are expected to stay open.
Neither Katzoff nor BSP’s attorney, Michael Goldstein, responded to requests for comment.