The late-night lines at YoYo's Hot Dogs might still snake down Washington Avenue, but behind the scenes the cult-favorite stand is locked in a bitter ownership fight. Co-owner Peter Montes has taken his partners to court after a March lawsuit in which he says he holds a 49 percent stake in WH YoYo LLC and accuses co-owners Danny and Chang Kim of diverting assets and shutting him out of the business's financial records. A Harris County judge granted a temporary injunction on April 6, 2026 that restricts certain financial moves while the dispute plays out, leaving staff and customers wondering what the late-night hot dog destination will look like when the dust settles.
What the lawsuit says
According to Montes' court filings, he owns a 49 percent stake in WH YoYo LLC and audited the books in July 2025. He says he found monthly sales above $120,000 but only about $47,000 in the company's bank account. Montes alleges he had been receiving monthly distributions of roughly $70,000 to $80,000 and accuses the Kims of self-dealing, including moving money and assets into related businesses and attempting to cut him out with a new operating agreement. He asked the court to freeze suspect transactions and recover damages. A judge granted a temporary injunction on April 6, 2026 and the case is scheduled to return to court on March 1, 2027, as reported by the Houston Chronicle.
Kims respond and ask to dissolve the injunction
The Kims have filed an answer and a motion to dissolve the injunction, denying the allegations and calling Montes' accusations vague. In their filing, the Kims wrote that "The plaintiff [Montes] alleges 'misuse of funds,' 'self-dealing,' and similar misconduct, but fails to identify with any specificity the factual basis for such claims," and asked the court to remove what they describe as an overly broad order, according to the Houston Chronicle. Their attorneys argue the injunction is interfering with day-to-day operations while the dispute works through the legal process.
Business impact and what's next
The injunction currently in place forbids transferring, spending, concealing or dissipating company funds outside regular operations, making loans to related businesses, changing governance, or altering the books. Those restrictions could complicate payroll, renovations or other business decisions. For now, the restaurant is still a popular late-night draw, but the legal fight has injected uncertainty into future plans and investor relations. YoYo's lists a Washington Avenue storefront and late-night hours on its official site, and local reporting notes the brick-and-mortar was first announced for the Washington Avenue corridor in 2021 before opening in 2024, per YoYo's Hotdog and reporting by Community Impact.
If Montes prevails, potential remedies could include recovering any diverted funds, changes to governance or other damages that would reshape who controls the brand. If the injunction is dissolved, the partners could return to business as usual, at least on paper. With the case set to return to court on March 1, 2027, the months ahead are likely to be drawn out and watched closely by employees and fans. This story will be updated as new filings or statements become public.
