A key adage of the corporate world is "don't go into business with a friend". American oil baron John D. Rockefeller put it best: "A friendship built on business can be glorious, while a business built on friendship can be murder."
It seems no one told the founders of the Grill'd hamburger chain.
![Grill'd founder Simon Crowe.](/web/20161121065742im_/http://www.smh.com.au/content/dam/images/g/s/r/h/t/g/image.related.articleLeadwide.620x349.gssf5u.png/1479463688865.jpg)
The past week has seen one of the more acrimonious fall-outs between business partners laid bare before the Federal Court of Australia, where business partners Simon Crowe and Geoff Bainbridge are battling over the future ownership of the $300 million fast-food business.
Under oath, Bainbridge admitted to calling his former friend a "c---".
Crowe's barrister, Philip Crutchfield, QC, had to spell out the four-letter expletive for the Federal Court.
"I apologise to everyone, I will spell it – that you called him a c---. What do you say? That is, you called Crowe a c---?" inquired Crutchfield.
"I have in the past," replied Bainbridge.
"It's an expression you've used?" inquired Justice John Middleton of the witness. "You have used that expression in relation to Mr Crowe?"
![Grill'd is one of the great success stories of Australia's retail sector.](/web/20161121065742im_/http://www.smh.com.au/content/dam/images/g/s/s/w/3/0/image.related.articleLeadwide.620x349.gssf5u.png/1479463688865.jpg)
"I have, yes," replied Bainbridge.
Relationship strained
The feeling, the court soon learned, was reciprocated. Speaking about the man who was emcee at his wedding, Crowe pulled no punches.
![Former chief executive of Boost Juice and childhood friend of Simon Crowe, Simon McNamara.](/web/20161121065742im_/http://www.smh.com.au/content/dam/images/g/s/s/w/3/d/image.related.articleLeadwide.620x349.gssf5u.png/1479463688865.jpg)
"Your honour, I have gone through this journey now since, effectively, January 2015 and Geoff has consistently misrepresented his position," Crowe told the court.
"He has lied through the court process. He is somebody I cannot trust and who I detest."
He has lied through the court process. He is somebody I cannot trust and who I detest.
Simon Crowe speaking of Geoff Bainbridge
To cap it off, he added: "I struggle to be in the same room with him. There's other people in my business who are senior who know how I feel about him and many of them share the same feelings."
It was spectacular evidence, from two men who had turned a single burger joint in suburban Hawthorn into a $300 million empire, and were now at war.
![More than 80 outlets are directly owned by Grill'd.](/web/20161121065742im_/http://www.smh.com.au/content/dam/images/g/s/s/w/5/q/image.related.articleLeadwide.620x349.gssf5u.png/1479463688865.jpg)
In many ways, Grill'd is one of the great success stories of Australia's retail sector.
Childhood friends
Back in 2004, Crowe wanted to start a "healthy burger restaurant" in Hawthorn.
![Grill'd co-founder Geoff Bainbridge.](/web/20161121065742im_/http://www.smh.com.au/content/dam/images/g/s/r/j/b/2/image.related.articleLeadNarrow.300x0.gssf5u.png/1479463688865.jpg)
He offered 20 per cent each to friends Simon McNamara, the former chief executive of Boost Juice, and Bainbridge, an ex-Fosters executive.
The three were more than business partners. McNamara and Crowe were childhood friends, while Crowe and Bainbridge had met at Fosters in 1999. In his affidavit, Crowe described Bainbridge as "both a friend and mentor to me" during their years working at the brewing giant.
As Grill'd grew, the men prospered. From a combined investment of $500,000 in 2004, the Grill'd chain had expanded to 140 stores by the middle of last year. More than 80 are directly owned by Grill'd, with the remainder owned by franchisees.
But, it seems, with the money came tension. By 2011, the decades-long friendship between McNamara and Crowe was on the rocks. Crowe resented McNamara's involvement in Spud Bar, another fast-food chain. To ease the tension, Crowe and Bainbridge bought out McNamara's share in Grill'd in mid-2011, but by now cracks in the relationship between the remaining owners were starting to emerge.
In 2013, Crowe discovered that McNamara and Bainbridge were partners in the Bounce trampoline business.
"Bainbridge's investment in Bounce made me question his loyalties," Crowe said in his affidavit.
Road trip
Against that tense backdrop, the pair travelled to Cambodia together, in June 2013, to take part in a charity bicycle ride. "At the time we travelled to Cambodia, our relationship was strained," Crowe admits.
Adding to the tensions were rumours that Bainbridge was looking to invest in a number of restaurant chains, including Fonda, Roll'd, and Baker D Chirico. These rumours irked Crowe, but the final straw came when he learned that Bainbridge was investing in a restaurant chain called Pizza Religion.
"I formed the view that Pizza Religion was a competitor to Grill'd and operating in the same market," Crowe states in his affidavit.
From that point on, the relationship between the friends and business partners turned toxic. Crowe saw Bainbridge's investment in Pizza Religion as disloyalty.
This is despite the fact that, in Sydney's Darlinghurst, Crowe had leased a retail site he owned to a rival pizza restaurant. That site was just 20 metres from an existing Grill'd store.
By his own admission, Crowe has "restricted" and "narrowed" Bainbridge's access to the financial records of Grill'd. He has even admitted under oath he had "no understanding of director's duties", and lied to his business partner to try to get him to sign-off on company accounts.
Secret valuation
The court also heard that Crowe engaged Moore Stephens to conduct a secret valuation of the burger chain. It came back with a figure of $314 million, which would have made Bainbridge's stake worth almost $80 million. When Crowe was unhappy with that figure, the court was told, he changed the "inputs" that Moore Stephens used for their calculation, to get a new lower figure of $237 million.
That valued Bainbridge's stake at just under $60 million. Mr Crowe offered him just $30 million, later lifting it to $47 million. Bainbridge refused both offers.
And so the one-time friends have ended up in court. Bainbridge is seeking to have chief financial officer Matt Caulfield and director Matt Reid, a partner at PwC and one of Mr Crowe's closest friends, removed from the company.
He also accuses Crowe of breaching his duties as a company director, and using company staff and resources to fund his purchase of embattled chocolate company Koko Black.
In a counter-claim, Crowe is seeking an order forcing Bainbridge to sell his stake, claiming it is impossible for the pair to ever work together again.
After turning such a small investment into such a successful empire it's hard to believe the burger kings have ended up airing their dirty laundry in court. "I find it hard to believe that commercial people can't find a way through, Justice Middleton said on the opening day of the case.
Late on Friday, amid growing media interest in the dispute, Crowe's legal team made an offer – to allow Bainbridge to remain a director of the company.
Over the weekend, there is a chance the former friends may settle their differences. Otherwise the bun fight begins anew on Tuesday.