Jacksonville Lawsuit

Duval County Circuit Judge James Daniel gave the current operators of Edgewood Bakery in Jacksonville, Florida, until Friday, January 9, to respond to Jacksonville Jaguars owner Shad Khan’s lawsuit seeking control of the business he invested in under his firm Stache Investments, according to a January 5 report by Jacksonville.com.

Emails show a June 5, 2014, exchange between Tom Rykalsky of Edgewood Bakery/U.S. Culinary & Beverage and Jim Zsebok, the representative for Stache.

“I [Stache] will own 56 percent … of U.S. [Culinary] and your holding company with Mike [Zimmerman] will own 44 percent,” Zsebok said while explaining in the email his interpretation of the ownership agreement of Edgewood Bakery.

“That sounds correct,” Rykalsky said in an email reply sent from his smart phone.

U.S. Culinary & Beverage is the company of Tom and Carol Rykalsky and their partner Mike Zimmerman, who are currently running Edgewood Bakery. Those emails were filed with court documents Dec. 31.

“They [U.S. Culinary] have filed and verified the complaint that sets out their version of the case. It does not, however, address some emails from Mr. Rykalsky that set forth his agreement to terms of Stache being the individual owner of this entity,” Stache attorney Bill Adams told Judge Daniel at Monday’s meeting. “Unless Mr. Rykalsky denies these two emails, that may bring this to a rapid conclusion.”

On Monday, the judge merged two competing lawsuits: the first was filed in early December by Khan and his investment firm Stache Investments seeking sole ownership of the business. The other was a countersuit by the Rykalskys, also seeking ownership.

Khan contends that since Stache Investments provided $800,000 of seed money to the Rykalskys to buy the bakery in June 2014, the court should appoint his company as the majority owner and grant control of the business to the firm. The suit says the Rykalskys and Zimmerman, under the business entity U.S. Culinary & Beverage, have hurt the business through waste.

Matt Jackson, attorney for the Rykalskys at Monday’s hearing, did not address the emails, but said he would file a motion to dismiss the civil court suit.

Meanwhile, as the case progresses in court, both sides are scheduled to take part in private mediation Wednesday in Orlando. If no mediation agreement is reached Wednesday in Orlando, both sides are scheduled to return to Daniel’s hearing room from 1 p.m. to 3 p.m. Friday, when arguments will be made over receivership and ownership. That’s when a judge appoints a “receiver,” or person to oversee the finances of an operation during litigation.

Daniel said during the hearing Monday that ultimately the case hinges on that disputed ownership of the bakery, no matter what else is happening legally this week, either in or out of court.

“The basis of the receivership and the basis of preliminary injunction are all going to turn on ownership,” Daniel said.

Jackson acknowledged that if no mediation is agreed upon Wednesday, Friday’s civil court hearing could play a major role toward determining the outcome of the case.

Edgewood Bakery is an institution in Jacksonville that has been operating on Edgewood Avenue for nearly seven decades.

The business remains open. The Rykalskys and about 40 employees continue to manage operations despite multiple notices of termination sent by Stache Investments to the workers there.