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Since 2021, Knitting Factory’s chief executive, Morgan Margolis, and partners Stephen Hendel and John Chapman were locked in a bitter dispute with the venue’s co-partners, Joseph Moresco and Lisa Elin.

In 2021, after Moresco and Elin changed the locks on the venue and blocked Margolis from the venue’s operations, Margolis and his partners sued the couple, alleging breach of contract, breach of fiduciary duty and other charges, and asked that Moresco and Elin be removed as general partners.

The jury found that Margolis and partners “had the authority to remove Moresco Holdings as the general partner of the partnership. Despite that removal, Defendants proceeded to utilize partnership assets.”

Representatives for Moresco and Elin did not immediately respond to requests for comment.

In 2021, Moresco and Elin’s attorney Bryan Freedman described the suit as “nothing but a hostile takeover attempt by New York billionaire Stephen Hendel. Hendel is completely rewriting the case in his latest plot to steal Pappy & Harriet’s from the community.”