Scotty's Brewhouse founder says he did not mislead investors

The founder of Scotty's Brewhouse denied defrauding two investors who filed a lawsuit Tuesday seeking at least $1 million.

Scott Wise said he was "disappointed" to hear of the lawsuit filed by Mark Bosler of Fort Myers, Florida, and Michael Murray of Indianapolis. The pair allege that Wise violated securities laws by making false statements to the two investors and failing to register securities, according to the lawsuit filed in Marion Superior Court.

The lawsuit comes just over a month after Scotty's Brewhouse said it was closing restaurants in Carmel, Muncie, Downtown Indianapolis and Waco, Texas, as part of a Chapter 11 bankruptcy case. Wise sold the chain to Due North Holdings LLC in 2016.

"Mr. Bosler invested in Scotty’s Brewhouse in 2009. Nine years later, in 2018, was the first time he ever suggested, through his lawyer, that I had somehow misled him in connection with his investment," Wise said in a written statement provided to IndyStar. "The same can be said for Mr. Murray, who invested in 2015."

Wise said he did not mislead the two men or any other investors.

"Unfortunately," Wise said, "the Scotty’s Brewhouse chain experienced financial difficulties that adversely impacted the return to all investors, including me."

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Court documents say that the investors put more than $1 million into the company from 2009 to 2015 and that the money was lost because the securities were never registered.

“The defendants failed to register their securities, failed to fully disclose what exactly they were selling and to whom, and then engaged in a series of misrepresentations and omissions designed to keep these investors in the dark while Scott Wise pocketed well over $1 million in payouts,” one of the investors' attorneys, Chris Jeter, said in a written statement.

The lawsuit alleges that Wise was seeking investors because he was in need of money to fund an aggressive growth plan during 2008's economic downturn. The loans provided to Wise over the years were converted to ownership in the company, and court documents say that Wise told investors that he would double their money when the company was sold.

The lawsuit says Wise told the investors that the sale would total $20 million, with the company having $5 million in debt. The lawsuit says the sale actually totaled $10 million, with $8 million in debt.

The plaintiffs also allege they were misled about the value of their investment and what percentage of ownership they were acquiring. Wise is being accused of violating a duty to them as business partners when he profited from the sale of the company as they lost money.

Wise said the two men were offered access to all company information before investing.

The two men are seeking a return of the more than $1 million invested in the company, plus interest.

Call IndyStar reporter Justin L. Mack at 317-444-6138. Follow him on Twitter: @justinlmack.