Judge orders Teavana to stay open?

https://nypost.com/2017/12/01/judge-bars-starbucks-from-closing-77-failing-teavana-stores/

Apparently Starbucks Teavana is not doing so well and Starbucks wants to close them all down. However, an Indiana judge says they can't.

What the.................

How does this make any sense?

Quite an unfair ruling.

Originally posted by @vivify
Quite an unfair ruling.

Maybe, maybe not. Starbucks has a lease with the owners of these malls which it wishes to break. I'd have to know more details before I'd say the ruling is "unfair".

As I thought:

In an unusual legal move, Simon Property Group Inc. has sued Starbucks Corp. over the coffee giant’s plan to close 78 Teavana stores in its malls across the country.

Indianapolis-based Simon, the country’s largest shopping mall operator, says in the lawsuit that Starbucks is breaching its leases by closing the Teavana stores and “shirking its contractual obligations at the expense of Simon’s shopping centers and the dozens of communities they serve and support.”

In the suit, filed Aug. 21 in Marion Superior Court, Simon said it is seeking temporary and permanent injunctions preventing Starbucks from closing the stores.

Seattle-based Starbucks announced July 27 that it planned to close all 379 of its Teavana stores in the next year, with most closures taking place in the spring of 2018.

Simon, though, said Starbucks recently indicated that it intends to close the stores no later than Dec. 31. The mall landlord said only two of its Teavana leases expire prior to the spring and the other 76 extend as far as January 2027.

“In order to successfully operate its shopping centers, Simon depends upon each tenant fulfilling the covenants in their respective leases,” the company said in its suit. “Crucially, each of Simon’s tenants promises that it will open and operate continuously for the entire term of its lease.”

------------------------------------------------------------------------------------------------------------------

“Starbucks’ decision to close its Teavana stores is simply an effort to further increase its economic gains at the expense of others,” Simon said. “Starbucks does not contend that Simon breached any lease or that Starbucks cannot remain viable if it continues to honor its promises in its leases for stores in Simon’s shopping centers. Instead, Starbucks simply believes it can make more money if it violates the leases than if it honored its contractual promises and obligations.”

https://www.ibj.com/articles/65175-simon-sues-starbucks-in-bid-to-block-mass-teavana-closings

Simon has a point, doesn't it?

Originally posted by @no1marauder
As I thought:

In an unusual legal move, Simon Property Group Inc. has sued Starbucks Corp. over the coffee giant’s plan to close 78 Teavana stores in its malls across the country.

Indianapolis-based Simon, the country’s largest shopping mall operator, says in the lawsuit that Starbucks is breaching its leases by closing the Teavana stores and “shi ...[text shortened]... 175-simon-sues-starbucks-in-bid-to-block-mass-teavana-closings

Simon has a point, doesn't it?

"Simon has a point, doesn't it?"

Absolutely. Whodey's article left out such details, and made it seem like the judge was trying to save the mall money at the expense of Starbucks.

I'm completely at fault for not looking more into this before forming an opinion.

EDIT: Is there any provision allowing retailers to end their lease early if profits are too low? I would imagine that's not an unusual scenario, and that stipulations exist for that. Otherwise, those leasing could be in quite a bind.

Originally posted by @vivify
"Simon has a point, doesn't it?"

Absolutely. Whodey's article left out such details, and made it seem like the judge was trying to save the mall money at the expense of Starbucks.

I'm completely at fault for not looking more into this before forming an opinion.

EDIT: Is there any provision allowing retailers to end their lease early if profits are ...[text shortened]... nario, and that stipulations exist for that. Otherwise, those leasing could be in quite a bind.

Gosh, I am SO pisssed. Good thing I drink tea.

Originally posted by @sonhouse
Gosh, I am SO pisssed. Good thing I drink tea.

Maybe, but what does that have to do with Starmucks?

Originally posted by @vivify
"Simon has a point, doesn't it?"

Absolutely. Whodey's article left out such details, and made it seem like the judge was trying to save the mall money at the expense of Starbucks.

I'm completely at fault for not looking more into this before forming an opinion.

EDIT: Is there any provision allowing retailers to end their lease early if profits are ...[text shortened]... nario, and that stipulations exist for that. Otherwise, those leasing could be in quite a bind.

I left out this part of the article which is responsive to your EDIT:

In the lawsuit, Simon said it has seen a long line of retailers close mall stores in recent years because of “financial distress,” including Sears, Sports Authority, Gap, Ralph Lauren, Finish Line, Macy’s, Nine West, Rue 21, Jones New York, American Eagle and others.

“Those retailers, at least, claimed closure was necessary to avoid bankruptcy, and that staying open and fulfilling their leases would cause them financial ruin,” Simon said in the suit. “That obviously is not the case with Starbucks, which is one of the largest and most recognized companies in the world.”

Teavana isn’t losing money, Simon said in the suit—it just isn’t growing fast enough to fit into Starbucks’ business strategy.

Starbucks is a “thriving company” with a market capitalization of more than $80 billion that is coming off a record quarter in which it opened 575 net new stores, Simon said.


Apparently if fulfilling the conditions of a lease would cause a company's "financial ruin", it can get out of it.

Originally posted by @no1marauder
I left out this part of the article which is responsive to your EDIT:

In the lawsuit, Simon said it has seen a long line of retailers close mall stores in recent years because of “financial distress,” including Sears, Sports Authority, Gap, Ralph Lauren, Finish Line, Macy’s, Nine West, Rue 21, Jones New York, American Eagle and others.

[b]“Those r ...[text shortened]... illing the conditions of a lease would cause a company's "financial ruin", it can get out of it.

Apparently if fulfilling the conditions of a lease would cause a company's "financial ruin", it can get out of it.


If I may ask: Does this also mean if fulfilling the conditions of a contract would cause the company's "financial ruin", it can also get out of it?

Originally posted by @mchill
Apparently if fulfilling the conditions of a lease would cause a company's "financial ruin", it can get out of it.


If I may ask: Does this also mean if fulfilling the conditions of a contract would cause the company's "financial ruin", it can also get out of it?

To be completely accurate, failure to pay according to terms is still technically a breach of contract: financial adversity alone will not generally excuse contractual performance. See Covenant Med. Mgmt., Inc. v. Knepper, No. 3:06-CV-185, 2006 WL 3333021, at *5 (E.D. Tenn. Nov. 16, 2006) (“unexpected financial difficulty, expense or hardship does not excuse a contractual promisor from performing his undertaking when the
contract does not provide otherwise&rdquo😉 (citation omitted).

https://www.ebglaw.com/content/uploads/2014/06/24304_Special_eReport.pdf

Realistically if the party is truly unable to pay because of "financial ruin" then they surely would be unable to pay any judgment based on said breach. Moreover, they probably would be able to file for bankruptcy protection if the other party pressed its claim.