NEW YORK — David Protein, facing a lawsuit, denied hoarding an ingredient from Epogee, which it acquired in May, in a June 11 filing with the US District Court for the Southern District of New York. David Protein wants to turn Epogee into a profitable business by finding larger companies as customers and phasing out smaller companies as customers, said Zachary Ranen, a co-founder of David Protein, in the court filing.

Plaintiffs Own Your Hunger LLC, Lighten Up Foods and Defiant Foods LLC filed a lawsuit June 2 against defendants Linus Technology, Inc. (known by David Protein as its trade name), Epogee LLC and Peter Rahal, the other co-founder of David Protein, for allegedly engaging in unlawful monopolization in violation of federal antitrust laws. David Protein acquired Epogee through “secretive and collusive conduct,” using control over esterified propoxylated glycerol (EPG), an ingredient used to lower fat in products, to exclude competitors from using EPG and to create an artificial monopoly, according to the lawsuit,

Epogee makes EPG through a patented process that breaks apart the natural structure of certain fat molecules and alters them in a way that minimizes the body’s ability to break the molecules down and process them as calories, according to the June 11 court filing. EPG has 0.7 calories per gram while other fats typically have about 9 calories per gram.

Epogee holds the patents for EPG and is the only source for the ingredient, according to David Protein’s June 11 court filing.

“With that knowledge, we did what many businesses do when faced with a single source of supply: We negotiated a long-term supply agreement that guaranteed us access to EPG,” Ranen said in the court filing. “We even agreed to make down payments to secure our flow of product. Two other Epogee customers who at one time relied on EPG as an ingredient in their products similarly signed long-term supply agreements with Epogee.”

David Protein became Epogee’s largest customer for EPG. The three plaintiffs in the lawsuit did not negotiate a similar supply agreement, according to the June 11 court filing. Epogee was losing money on sales to the plaintiffs because the cost of production was higher than the sales price on a per-pound basis, according to the June 11 court filing. The plaintiffs purchased EPG in small quantities and in some instances received free samples. Epogee has no records of Lighten Up LLC ever placing a purchase order with Epogee or paying Epogee any money. Epogee records show Defiant Foods placing two orders with Epogee, one for $760 and the other for about $2,700.

The owners of Epogee, because of the losses, approached David Protein about an acquisition, which was completed on May 9.

Ranen responded to the plaintiffs’ accusation of “secretive and collusive conduct” by David Protein.

“In my experience, most businesses (both public and privately owned) do not disclose pending sale negotiations until a deal is actually signed,” he said.

David Protein, now owning Epogee, decided that Epogee should target large food companies that could place orders for millions of pounds of EPG and should wind down relationships with smaller customers that were not allowing Epogee to achieve a profit. David Protein contacted 11 Epogee customers, but not the three plaintiff companies, to confirm that Epogee intended to continue fulfilling their orders.

“Our approach was not to categorically eliminate access, but to shift toward serving customers capable of placing consistent, high-volume orders—an essential step for transforming Epogee into a viable business,” Ranen said. “Customers without purchase commitments, or whose small or intermittent orders resulted in financial losses, were phased out transparently. At no point did we ‘hoard’ all available EPG or refuse to sell across the board, as plaintiffs suggest.”