On opening day — Memorial Day weekend, 2011 — Garcia and Swan mugged for the cameras holding giant sundaes, grins plastered across their faces.
There was good reason to smile. For some weeks after its opening, the restaurant had hourlong waits for tables. As Judith Beermann wrote on the Georgetown Dish website, guests “enjoyed lunch as if they’ve been coming here for years.”
Away from the gaze of guests, however, it was a different story. The partners began to “butt heads” almost immediately after signing their lease, Garcia later told police. One of their earliest problems centered on something both basic and critical: negotiating how the company would be set up and operated.
Swan wanted to head up the day-to-day operations, overseeing staffing, purchasing, and service. He saw Garcia focusing on PR, marketing, and private events: acting as the public face of Serendipity. “[I have] opened numerous hospitality locations and [have] a good reputation,” Swan e-mailed an attorney at the time. “This restaurant and investment opportunity needs ONE person with the final say-so.”
Garcia didn’t like that idea—and didn’t think running Rhino Bar qualified Swan for the task. “It’s not rocket science to own and run that,” Garcia later told police. “He’s not sophisticated enough to be a restaurateur. Between a college bar and a restaurant, it’s night and day.”
After months of haggling, Swan and Garcia finally signed the paperwork establishing their partnership. Swan did so thinking he was in charge. Only later did he realize that wasn’t the case. Edited into the final draft was a change he hadn’t noticed at the time: It gave the partners equal authority over day-to-day operations at Serendipity. The arrangement meant future disagreements would be a nightmare to settle. If irreconcilable problems arose, Swan and Garcia would have no choice but to appeal to Serendipity’s investors. And the final interest structure—42.5 percent for Swan, 32.5 percent for Garcia, 10 percent for Garcia’s mother, 5 percent for Garcia’s brother, and the remaining 10 percent split between a friend of Garcia’s and an acquaintance of Swan’s—would create an environment where investors had to pick sides.
The agreement also made it nearly impossible for either Garcia or Swan to force the other out. “In the event of any serious disagreements . . . termination of a manager was very difficult,” Garcia said in an affidavit. “It would be messy to split up the business.”
There was one way, however. Tucked inside the 25-page document was a brief clause that would become pivotal in the future: It stated that if convicted of a felony, a partner could be removed from the company.