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Judge bars Starbucks from closing 77 failing Teavana stores

Posted by $ AJAshinoff 7 years, 5 months ago to Business
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No fan of Starbucks, but a private business being told by government it can't prevent its losses? WTF??

"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."

Atlas has Shrugged.


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  • Posted by walkabout 7 years, 5 months ago
    Will her honor next order the employees to continue to work at the underperforming stores? Stores that do not generate enough income to pay them the wages they agreed to? Or will the judge reduce the minimum wage to put the income/outgo equation back into balance? I'm no fan of SB's -- I would put "do you patronize Starbucks" on an IQ test and if "yes," lower otherwise generated IQ by 10 points -- paying what they charge for coffee is nuts, but that's just a clinical opinion.
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  • Posted by $ jdg 7 years, 5 months ago in reply to this comment.
    Breaches of contract are a different area of law than crimes, and typically are governed by common law rather than statute. It's unusual that a judge will order a breaching party to perform as he said he would (specific performance), because it can be involuntary servitude; usually money damages are awarded instead. I'd like to hear the reasons the judge gave for not doing that, before I decide whether I agree with it or not.

    But closing a store that is losing money is something all retailers do, and it often involves breaking a lease. I see no major or unusual wrong here unless it's by the judge.

    David Friedman, in Law's Order, discusses breach of contract (and why it should often be allowed) at great depth.
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  • Posted by $ 7 years, 5 months ago in reply to this comment.
    made me think..:)

    I'd say ridiculously unreasonable.

    Why have bankruptcy laws if people can be forced to remain in business while hemorrhaging money?
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  • Posted by Dobrien 7 years, 5 months ago in reply to this comment.
    No if it was written by Ayn Rand it would have clearly stated the contract and the commitment made by both parties. Did Starbucks guarantee the lease and receive a discounted rent because of their financial strength? Or not. Maybe they are trying to have it both ways and it bit them in the ass.
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  • Posted by NealS 7 years, 5 months ago in reply to this comment.
    Please define "absurd" in terms of today's politics. It's almost as difficult as defining "is" today.
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  • Posted by $ 7 years, 5 months ago in reply to this comment.
    I seriously doubt, and I'm no expert int he matter, that there is any such a law which says you must remain in business losing money and paying everyone so they don't. Its absurd.
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  • Posted by $ 7 years, 5 months ago in reply to this comment.
    It is highly suspect that a judge with ANY type of agreement COULD force a company to stay in business. The only logical thing that could occur for a violation of a contractual agreement is lost wages, fees, and a penalty. By what authority does a judge say "You must remain in business and continue taking losses to support the landlord's profitability." Its irrational.
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  • Posted by term2 7 years, 5 months ago in reply to this comment.
    If its seriously losing money, I would think they would get better PR by being smart business people and admitting a mistake and correcting it. I dont want to pay more for my starbucks stuff (which I dont buy anyway actually) than I had to.

    When the NFL offered 100 million to the black players (who make millions each) to help their "cause"- all I thought of was how much my ticket prices would go up as a result. It made me upset and even less likely to go to an NFL game
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  • Posted by $ Radio_Randy 7 years, 5 months ago in reply to this comment.
    Makes me even happier I bought that "Guns and Coffee" sweatshirt with a Starbucks (like) logo on the front.
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  • Posted by $ CBJ 7 years, 5 months ago in reply to this comment.
    In areas where the article is unclear, hypothetical possibilities are all we have to go by. This issue makes for a good "thought experiment" that can be useful in clarifying and defending our principles.
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  • Posted by chad 7 years, 5 months ago
    There are many unknowns here, what is required by the lease? Is an option to abandon the lease in place i.e. penalties that the offending company could pay? That the judge made clear that it is a non-anchor tenant (usually less restrictive leases) and had has stated that it is for preliminary or permanent injunctive relief clearly indicates her ruling is outside the bounds of enforcing the contract but to maintain income for the offended party. I do agree that Starbucks is a socialist company and don't care if they get their comeuppance at the hands of those they have empowered. The legal precedent is dangerous for any who might try to follow a similar path.
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  • Posted by tdechaine 7 years, 5 months ago in reply to this comment.
    One should not force a business to stay open (except by contract) - that is immoral. Condoning and using such a law is immoral.
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  • Posted by Domminigan 7 years, 5 months ago in reply to this comment.
    Tdechaine believes you were being somewhere in the realm of serious rather than understanding that you were agreeing that the decision seems to be a ludicrous farce and using a facetious, joking, sarcastic statement to agree that a judge ordering a tenant to stay is crazy.
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  • Posted by Domminigan 7 years, 5 months ago in reply to this comment.
    The business insider article also does not contain enough information. I haven't found any articles directly referencing the contract under which the tea shop was being operated in Simon properties except this from the Seattle times:
    Starbucks declined to say what its obligations, or any possible penalties, would be for pulling out of its leases early. A company spokesperson said only that “we are responding to the lawsuit and are working to resolve this dispute.”

    Source:
    https://www.seattletimes.com/business...

    Without anyone directly referencing the contract both parties agreed to, I cannot agree that it is a bad judgement.

    On the surface with the limited info I have; it is a bad judgement and fouls the court the judgement was given in. I am quite certain that I don't have all the information needed for me to actually hold that as my opinion yet. I cannot know fact from fiction when I don't know who agreed to what.
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  • Posted by NealS 7 years, 5 months ago in reply to this comment.
    That's way over my head, I'm a simple man. "should not take advantage of another regardless of law"? "morality"? I don't follow the connection??
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  • Posted by cranedragon 7 years, 5 months ago
    I checked out an article on the Wall Street Journal and it too was inconclusive on the basis for the judge's ruling. At this time I think it's too early to tell whether the judge was enforcing a valid agreement between the parties or engaging in social overreaching. Simon Properties isn't the kind of plaintiff that usually excites warm, protective feelings in the bosoms of judges.
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  • -3
    Posted by tdechaine 7 years, 5 months ago in reply to this comment.
    Facetious or not, one should not take advantage of another regardless of law. Morality always applies.
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  • Posted by NealS 7 years, 5 months ago in reply to this comment.
    I was being facetious, but you knew that. The rule I follow is "Obey the law, or cause the law to be changed". Trump also does that on his taxes, he takes intelligent legal advantage of the law. If the people don't like it, they need to change the law.
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  • Posted by Domminigan 7 years, 5 months ago in reply to this comment.
    Because the article is probably incomplete and may be very misleading.
    Starbucks is a very "progressive" company. Simon is a toilet stain of a company. There is no telling what they agreed to and no way of knowing if the reporting in this article is complete or fully accurate.
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  • Posted by Domminigan 7 years, 5 months ago in reply to this comment.
    Absolutely true.
    We can not trust media to give us unbiased fact. We never should have in the first place.
    If Starbucks has signed an agreement that states it keeps up the locations for it's tea stores by keeping those stores open and operational for the duration of the lease; then the ruling was appropriate and the media is electing to leave out that fact.
    If the lease agreement only states that it will pay the lease throughout the contract, AND the judge ordered them to keep the stores open; then the judge has overreached significantly, and the media has mostly fairly reported the situation.
    I would imagine the language of the contract falls somewhere in the middle of these. Unfortunately we cannot know what is going on without the lease, the ruling and probably all other associated paperwork in the case.
    Even my local reporters are being called out nearly daily for twisting facts to create sensational headlines or misleading articles.
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