In a legal battle that could shake the foundations of a local business, two plaintiffs have filed a lawsuit against their former business partner, alleging serious misconduct and breach of fiduciary duty. The complaint was filed by Jing Zheng and Yuzhu Chen on September 8, 2025, in the Superior Court of California, County of Santa Clara, against Xiaoli Hedy Xue and Prince Fen Guizhou Cuisine Service LLC.
The plaintiffs, Jing Zheng and Yuzhu Chen, are embroiled in a complex legal dispute with defendant Xiaoli Hedy Xue over the management and financial dealings of Prince Fen Guizhou Cuisine Service LLC. The case revolves around allegations that Xue misused company funds for personal expenses and failed to provide financial transparency to other members. According to the complaint, Zheng owns at least 10% of the membership interest in Prince Fen, while Xue holds a majority stake of 65%. This imbalance has led to claims that Xue has been operating the company without regard for minority shareholders’ interests. “Xue used the Restaurant’s funds for personal expenses,” states one section of the complaint. Furthermore, Zheng accuses Xue of attempting to oust her from the company by leveraging her impending divorce from Chen as an excuse.
The plaintiffs allege multiple breaches including breach of fiduciary duty, breach of contract, unfair competition, and failure to provide accounting records. They claim that Xue’s actions have deprived them of their rightful income from the restaurant’s operations. Additionally, Chen alleges that he has not received any licensing fees or bonuses despite being recognized as a third-party beneficiary in an operating agreement signed by Xue on behalf of Prince Fen. This agreement also acknowledges Chen as the owner of certain recipes crucial to the restaurant’s success but allegedly used without proper compensation.
Jing Zheng and Yuzhu Chen are seeking several forms of relief from the court. They demand compensatory damages for both Zheng and Chen for losses incurred due to alleged breaches by Xue. They also seek exemplary and punitive damages against Xue for willful misconduct along with reasonable attorney fees. Furthermore, they request an injunction preventing further violations under California Business and Professions Code Section 17200 concerning unfair competition practices. An accounting is also sought between Prince Fen with both Zheng and Chen regarding unpaid dues or withheld amounts.
Representing Jing Zheng and Yuzhu Chen is attorney Bing Zhang Ryan from Zhang Law Group based in Walnut Creek, California. The case is presided over by Judge Y. Chavez under Case No.: 25CV474500.
Source: 25CV474500_Jing_Zheng_v_Xiaoli_Hedy_Complaint_County_of_Santa_Clara.pdf
