Investors File and Quickly Dismiss Lawsuit Against Lucky’s Hot Chicken

A lawsuit filed on Thursday, August 24, in Dallas County by a group of investors named Hunter Pond, Lou Olerio of Olerio Homes, and Vandelay Hospitality Group as defendants. It alleged broken communication, a lost investment of $1.8 million, and claims of negligent misrepresentation and failure of fiduciary duty. The plaintiffs were seeking a $2 million settlement, just over what the lot claimed to have invested in expanding Lucky’s Hot Chicken across the Metroplex.

The group withdrew its suit on Friday, September 1, which attorneys on both sides told Eater Dallas would come as the result of an amicable resolution. They did not elaborate on what the settlement or negotiations entailed. The filing was dismissed without prejudice, which allows the plaintiffs to refile the same claim in the future if they choose. But the lawsuit shed light on what the immediate future of Lucky’s holds and what might have gone wrong with this widely publicized expansion.

Following the opening of two Lucky’s Hot Chicken locations under the Vandelay umbrella, one on Gaston Avenue — which is the sole remaining Lucky’s — and one that is now closed near SMU, the suit alleged that Pond and Olerio sought outside investments to expand. The pair aimed to open four more locations in Richardson, Arlington, Pleasant Grove, and Oak Lawn Avenue, plans which were widely shared in the media. The plaintiffs asserted that they were told the locations were already secured with leases in place, all in former restaurants that would require very little in start-up costs and ensure quick openings, which was a big part of why this investment was attractive. Pond and Vandelay would manage the locations. The Richardson location was allegedly owned by Oliero.

The investors amassed $1.8 million, which is what Pond and Olerio set out to raise, and the pair were to invest $200,000 of their own money as well, as stipulated by the investment agreement. But the investors alleged that as soon as the defendants had the money under their control, communications and updates became infrequent. The lawsuit asserted that “Olerio, a convicted felon home builder who Defendant Pond unilaterally put ‘in charge’ of supposedly getting the restaurants open ... was not fond of being questioned by investors and routinely would swear and berate them when questions were asked and information sought ... Most of the Plaintiffs’ requests for information were either ignored or met with falsehoods, hostility and deflection from Defendant Olerio.”

The felony referenced is Oliero’s guilty plea in a federal court case from 2013 for which he was convicted of “money laundering stemming from his role in a hydroponic marijuana growing operation,” per the U.S. Attorney’s Office, Northern District of Texas.

The suit alleged that by September 2022, and without the knowledge of the investors, no meaningful construction had begun on any of the locations. In the meantime, Vadelay and Pond opened Brentwood, expanded Hudson House with an opening in Los Angeles, a second D.L. Mack’s, and announced the opening of Anchor Bar.

When Lucky’s on Oak Lawn did open in February 2023, it closed after four months. According to the lawsuit, its investors only learned of the closure after driving by the location.

The three other locations never opened and the plaintiffs claimed that Pond, Oliero, and Vandelay had not accounted for the investment money.

Pond emailed the investors in May 2023, the suit said, to accept responsibility for the failure of the Lucky’s expansion, citing a “hot chicken market downturn, inflation, underfunding, construction costs, and unforeseen delays in the permitting process” as the reasons for the failure. The investors asserted they were not given any documentation to prove any of Pond’s claims and that they were not alerted at any point about problems, actual or potential.

In the meantime, the investors allege that the little accounting they did receive about the funds revealed that it was going to other projects by the defendants. According to the filing, the investors claim that thousands of dollars of their money were used by Olerio to improve his property in Richardson “for his personal benefit.”

With the suit put to bed, Dallas remains with one Lucky’s and apparently no plans to open other locations any time soon.

A representative for Vandelay Hospitality assured Eater Dallas that the remaining Lucky’s location will continue on.