Conlon cheated out of Chicago Chop House deal, lawsuit claims


UPDATE, Aug. 10, 11:35 a.m.: Conlon Real Estate is suing the owners of a River North steakhouse, claiming they cut the brokerage out of a deal to buy the restaurant in 2017.

In 2016, the Chicago Chop House’s previous owners reached out to Conlon Commercial about selling the restaurant business, the building that houses it at 60 West Ontario Street and the parking lot next door, according the suit filed in Cook County court.

After some negotiation, another entity of Conlon agreed to buy the restaurant and property for $8.2 million, and the two sides agreed to pay Conlon Commercial a $200,000 commission on the sale, according to a recently filed lawsuit.

Once the purchase contract was signed, Conlon reached out to hospitality veteran Matthew McCahill, Phillip Martin and Adam Will to see if they would partner in the restaurant venture. They agreed, and signed a non-circumvention and confidentiality agreement with Conlon in March 2017, according to the lawsuit.

Soon after signing the agreement and becoming privy to the deal’s financial information, McCahill and Martin secretly conspired to buy the Chop House and its real estate from the previous owners without the involvement of Conlon’s commercial arm, the lawsuit alleges.

After bringing on McCahill, Martin and Will, Conlon Commercial Principal Steve Horvath continued to negotiate with the Chop House’s owners, eventually getting the purchase price down from $8.2 million to $5.9 million.

But Horvath soon began having problems with the other investors, including Martin not providing his share of the escrow money needed for the deal, the lawsuit claims. Conlon was nearing its deadline to demand the return of its escrow funds, and on June 26, 2017, the brokerage broke off the deal due to the “defendants’ misconduct,” the suit alleges.

Four days after the deal was terminated, Martin told Horvath the other partners had reached an agreement to buy the Chicago Chop House and related real estate for $5.2 million and would not be teaming with Conlon on the deal, according to the lawsuit.

In November 2017, Horvath met with McCahill and Martin. The two admitted they violated the non-circumvention agreement and offered Conlon $25,000 in compensation, the lawsuit alleges.

Both sides then got lawyers involved, but an agreement was never reached. On Monday, Conlon filed suit against its former partners, asking a judge to compensate it for the lost business opportunity.

Horvath did not return a message seeking comment, and McCahill said he could not speak on the specifics of the lawsuit because the case was ongoing.

“It’s an unfortunate situation because I know Sean” Conlon, who founded Conlon and its affiliated real estate companies. Conlon in May was bought by Compass.

After buying the Chicago Chop House, McCahill and his partners announced they would put $1 million into the business, including a new top floor lounge, garden and late-night bar menu. Prior to investing in the chop house, McCahill served as director of nightlife at the Godfrey Hotel and helped develop the LondonHouse rooftop bar.

This story has been update to clarify the name of Conlon Real Estate.