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Suzanimal
12-03-2017, 10:29 AM
An Indiana judge has taken an unusual step and temporarily barred Starbucks from closing 77 failing Teavana stores in Simon Property Group malls because the real estate giant was less able to handle the financial pain.

Starbucks said in July it planned to shutter its 379-store Teavana operation — but Simon rushed to court to block 77 stores in its malls from going dark — claiming such a move by a high-profile tenant could spark other stores in its malls to close.

Starbucks, after trying to turn around its stumbling tea chain, said last August it was pulling the plug on Teavana.

It wanted to close all the stores by the end of the year.

But Indianapolis-based Simon, in an environment where hundreds of stores across the country are closing, rushed to a local court to ask Judge Heather Welch to stop the store closing.

Welch, in a 55-page order, found that the very profitable Starbucks could absorb the financial hit — estimated by Starbucks to be $15 million over five months — better than Simon could. The mall operator did not provide an estimate of how much the closings of the Teavana stores would hurt them.

The case is being closely watched by retailers and landlords alike amid a retail meltdown that has resulted in a record number of bankruptcies this year.

The retail failures have left landlords scrambling to find new tenants and retailers in the difficult position of breaking their leases.

Still, it is rare that a judge orders a retailer to keep stores open, retail experts said.

“I’m somewhat shocked by the ruling,” said real estate lawyer Joshua Stein. Welch “catalogues every possible detriment to Simon as a result of having vacant space,” Stein said, adding, “That’s part of a job description of owning real estate. You deal with it and don’t get injunctions to have your tenant continuing to operate.”

Other industry experts, who did not want to be identified, said the ruling will send a chill down the spines of distressed retailers.

“If you are a tenant that has to close a bunch of stores that are based in malls,” said one source, “you are pretty scared after this ruling.”

Welch admitted that “no court has ever entered preliminary or permanent injunctive relief to specifically enforce a continuous operations covenant against a non-anchor tenant” — but she did so anyway.

“We are disappointed in the judge’s ruling and will continue to focus on finding a resolution,” Starbucks, which has a market cap of $81 billion, said in a statement, noting that it is not clear whether it will appeal — or even if it is permitted to do so.

Simon’s vacancy rate as of Sept. 30 was 4.7 percent — slightly below the 4.8 percent national vacancy rate for all malls, according to JLL data.

Simon argues that if Starbucks is allowed to “prematurely” break its lease, it could be forced to fill the vacancies with “less creditworthy tenant(s)” or less desirable tenants “who will only agree to less desirable lease terms, and/or a shorter-term lease,” according to the court filings.
...

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

Weston White
12-03-2017, 11:59 AM
Was there an option to vacate the stores, while keeping up on the fees due until expiration of the agreement? ...Or was there an existing early termination penalty clause? Otherwise, they should appeal and file judicial misconduct complaint against that ass-hat of a judge and then use all those billions to ensure that tainted judge gets sacked by public.

sparebulb
12-03-2017, 12:11 PM
Socialist company gored by socialist judicial system.

Oh, the irony.

We are looking more and more like a Soviet centrally-planned economy.

Brian4Liberty
12-03-2017, 12:54 PM
Socialist company gored by socialist judicial system.

Oh, the irony.

We are looking more and more like a Soviet centrally-planned economy.

Too many socialists in all areas of government.

Suzanimal
12-03-2017, 12:59 PM
Was there an option to vacate the stores, while keeping up on the fees due until expiration of the agreement? ...Or was there an existing early termination penalty clause? Otherwise, they should appeal and file judicial misconduct complaint against that ass-hat of a judge and then use all those billions to ensure that tainted judge gets sacked by public.

I dunno. I'm curious to see the lease agreement. I have a hard time believing Starbucks would be so dumb as to not give themselves an out, especially with a new concept but, I suppose, stranger things have happened.

Brian4Liberty
12-03-2017, 01:03 PM
Welch, in a 55-page order, found that the very profitable Starbucks could absorb the financial hit — estimated by Starbucks to be $15 million over five months — better than Simon could.https://nypost.com/2017/12/01/judge-bars-starbucks-from-closing-77-failing-teavana-stores/amp/

"From each according to his ability, to each according to his needs".

TheCount
12-03-2017, 01:28 PM
"Fair" trade, meet "fair" economy.

angelatc
12-03-2017, 01:38 PM
To each, according to need.

AZJoe
12-03-2017, 07:09 PM
Simon Property, the landlord, sued the tenant and made a "we are a big family that cannot be divided" argument. The landlord argued that malls are “a co-dependent ecosystem of tenants with a complex system of governance that ensures its well-being.”

The judge unfortunately bought into that hogwash, at least for the preliminary injunction. It goes against existing law.
Parties have always been able to breach a contract, but simply been held accountable for the monetary damages caused by the breach.
For leases that would be up the total of the lease payments for the remainder of the lease term.
When a tenant breaks a lease, the law holds the tenant accountable with monetary damages. It does not force tenants to keep operating bad business models.
It is a terrible precedent.

It is also a question of supply and demand. If demand for mall space were high, the landlord Simon Property wouldn't care because it can just take the damages from the early lease termination, and still replace the tenant with another that it can keep charging with high rates. It is only because the demand is not so high, and Simon Property does not want to adapt to changing market conditions, that it brought the suit.

So if you are a landlord and cannot keep your tenants at the rates you want to keep charging,
rather than lower rates to make it more appealing and competitive; or use creativity and ingenuity to entice new tenants; offer free availability for community and school and holiday and festival events to increase traffic flow as market outreach; (in light of product based retailers online competition) shift from retail to more service centered tenants where onlines cannot compete such like chiropractic, salons, gyms, massage, training, amusement, sports, shows, venues, auditoriums, or open a section to farmers markets; even devote a section of the mall to swap meet; create a beautiful center park, even charge a per use or membership fee; private school or seminar space; indoor or outdoor advance playground on a modest per use or membership fee; track, indoor golf, volleyball, cross fit -
there is no end to the ability to use creativity, adapt, innovate, and respond to changing conditions

No, instead just don't innovate at all, and simply scream to government to forcibly keep your tenants there to "ensure [the landlord's] well-being" because we're a "co-dependent eco-system." Don't want to change with the times. "I want to keep my disco era business model no matter how the markets change."

Simon Property is acting just like the stagnant taxi firms' response to Uber and Lyft. Nothing prevented taxi firms from doing everything that Uber and Lyft are doing. Taxi firm could have innovated and created their own app to order a taxi. They could have developed app features that let someone know who their driver is and vice versa and allow reviews. They could have prided and marketed themselves on high reviews from their app feedback. They could have offered competitive pricing based on demand and supply - higher rates for high peak demand times and bargain rates for low demand times. Taxis firms had the huge head-start and business already in place. They could have innovated or even responded to changing conditions. But they refused to adapt and instead scream to the power of government to protect us "unfair" competition that offers better consumer service and responsiveness and flexibility.

"Please government you must protect the stagnant, obsolete and antiquated that refuse to adapt to change, from competition in changing conditions from the new technology, innovation, and creative and dynamic competition."

RonPaulIsGreat
12-03-2017, 07:22 PM
We are all socialists now.

Occam's Banana
12-03-2017, 08:42 PM
I don't see what all the fuss is about ...


An Indiana judge has [...] barred Starbucks from closing 77 failing Teavana stores in Simon Property Group malls because the real estate giant was less able to handle the financial pain.

Starbucks said in July it planned to shutter its 379-store Teavana operation — but Simon rushed to court to block 77 stores in its malls from going dark — claiming such a move by a high-profile tenant could spark other stores in its malls to close.

[...]

But Indianapolis-based Simon, in an environment where hundreds of stores across the country are closing, rushed to a local court to ask Judge Heather Welch to stop the store closing.

Welch, in a 55-page order, found that the very profitable Starbucks could absorb the financial hit — estimated by Starbucks to be $15 million over five months — better than Simon could. [...]

... after all, Teavana is obviously in clear violation of Point Two of Directive 10-289 ...


Directive 10-2891

In the name of the general welfare, to protect the people's security, to achieve full equality and total stability, it is decreed for the duration of the national emergency that:

Point One. All workers, wage earners and employees of any kind whatsoever shall henceforth be attached to their jobs and shall not leave nor be dismissed nor change employment, under penalty of a term in jail. The penalty shall be determined by the Unification Board, such Board to be appointed by the Bureau of Economic Planning and National Resources. All persons reaching the age of twenty-one shall report to the Unification Board, which shall assign them to where, in its opinion, their services will best serve the interests of the nation.

Point Two. All industrial, commercial, manufacturing and business establishments of any nature whatsoever shall henceforth remain in operation, and the owners of such establishments shall not quit nor leave nor retire, nor close, sell or transfer their business, under penalty of the nationalization of their establishment and of any and all of their property.

Point Three. All patents and copyrights, pertaining to any devices, inventions, formulas, processes and works of any nature whatsoever, shall be turned over to the nation as a patriotic emergency gift by means of Gift Certificates to be signed voluntarily by the owners of all such patents and copyrights. The Unification Board shall then license the use of such patents and copyrights to all applicants, equally and without discrimination, for the purpose of eliminating monopolistic practices, discarding obsolete products and making the best available to the whole nation. No trademarks, brand names or copyrighted titles shall be used. Every formerly patented product shall be known by a new name and sold by all manufacturers under the same name, such name to be selected by the Unification Board. All private trademarks and brand names are hereby abolished.

Point Four. No new devices, inventions, products, or goods of any nature whatsoever, not now on the market, shall be produced, invented, manufactured or sold after the date of this directive. The Office of Patents and Copyrights is hereby suspended.

Point Five. Every establishment, concern, corporation or person engaged in production of any nature whatsoever shall henceforth produce the same amount of goods per year as it, they or he produced during the Basic Year, no more and no less. The year to be known as the Basic or Yardstick Year is to be the year ending on the date of this directive. Over or under production shall be fined, such fines to be determined by the Unification Board.

Point Six. Every person of any age, sex, class or income, shall henceforth spend the same amount of money on the purchase of goods per year as he or she spent during the Basic Year, no more and no less. Over or under purchasing shall be fined, such fines to be determined by the Unification Board.

Point Seven. All wages, prices, salaries, dividends, profits, interest rates and forms of income of any nature whatsoever, shall be frozen at their present figures, as of the date of this directive.

Point Eight. All cases arising from and rules not specifically provided for in this directive, shall be settled and determined by the Unification Board, whose decisions will be final.

I wouldn't be surprised to find that Orren Boyle is one of the owners of Simon Property Group.

And Judge Welch sounds like an excellent candidate for the Unification Board ...

(It really can happen here, folks ...)



1 From Atlas Shrugged by Ayn Rand.

Swordsmyth
12-03-2017, 08:44 PM
This is how feudalism begins, first tenants are forbidden to leave their landlord's property then it becomes hereditary.

sparebulb
12-03-2017, 09:12 PM
I always knew that it would take quite an atrocity for me to be sympathetic to Starbucks.

Actually, I don't feel sorry for them and it wouldn't bother me if the whole organization were to fail by the machine of their own design.

But the aftermath of this makes life a little bit worse for the rest of us.

oyarde
12-03-2017, 11:21 PM
Simon Property Group has a lot of pull in Indy ( NYSE : SPG ) . It is the largest shopping mall company in america and its headquarters are in Indy . I would be surprised if a judge ruled against them in own city .

Swordsmyth
12-03-2017, 11:24 PM
Simon Property Group has a lot of pull in Indy ( NYSE : SPG ) . It is the largest shopping mall company in america and its headquarters are in Indy . I would be surprised if a judge ruled against them in own city .

With this kind of subjective legalism we are only a few generations from not just civil war but feudalism, if it is that far away.

oyarde
12-03-2017, 11:26 PM
With this kind of subjective legalism we are only a few generations from not just civil war but feudalism, if it is that far away.

My Fathers theory on the legal system was to be honest and forthright in all doings . When that fails just kill all the other parties before you need to go to court.

Swordsmyth
12-03-2017, 11:31 PM
My Fathers theory on the legal system was to be honest and forthright in all doings . When that fails just kill all the other parties before you need to go to court.



https://www.youtube.com/watch?v=n-rGCha73xQ

devil21
12-04-2017, 03:17 AM
With this kind of subjective legalism we are only a few generations from not just civil war but feudalism, if it is that far away.

There is no rule of law and hasn't been for a long time. People think that judge's jobs are to administer "justice" but nothing is farther from the truth. Today's judges are expressly tasked with being the day-to-day controllers of the economy, the continual movement of money, on behalf of the bankers. American BAR associations are subordinate to the British BAR, a Rothschild created organization.

shakey1
12-04-2017, 06:53 AM
Shoulda used a stronger glue for their façade.:cool:

oyarde
12-04-2017, 10:06 AM
I find a business plan to open a tea store in an Indianapolis mall laughable . How much money did they think they were going to rake in on that ? WTF

oyarde
12-04-2017, 10:09 AM
Who really drinks that tea that smells like orange peel and axle grease ?

sparebulb
12-04-2017, 10:14 AM
Tea is for faggy Brits.

Whoops, redundant statement there.