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Tully’s Coffee in bankruptcy

The Seattle-based coffee company has filed for bankruptcy and looks for potential buyers.

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This story has 7 updates
Local News
09/18/13

Beer rules again at former coffee roasting plant

RainierSEATTLE — Remember the giant “R” for Rainier Beer that used to welcome thirsty visitors to South Seattle? Well, it’s coming back.

According a release from Tully’s Coffee, the new owners of the roasting plant will replace the “T” for Tully’s that has stood atop a South Seattle building since 2000, in favor of the neon “R” which stood at the same building for 50 years.

The letters will be switched out in November, officials said. The new “R” will be modeled after the original, taken out after Rainier Brewing stopped making beer in the building that it had occupied since the Prohibition era.

The Tully’s Roasting facility was moved a few years ago to Sumner and Rainier Beer is now brewed by the Pabst Brewing Company in California. Dan McHugh, chief marketing officer for Pabst said, the company has been working with Columbia Distributing, MOHAI, Western Neon and the buidling’s owner to reinstall the “R.”

“To celebrate the raising of the new ‘R,’ we are hosting a party that evening, which will be free to attend and open to the public,” McHugh said. “In addition to a gorgeous new R, we’ll provide entertainment and plenty of Vitamin R in a pop-up beer garden, with all proceeds going to MOHAI.”   

“The Rainier ‘R’ has deep historical meaning to the Seattle community,” Michael Avenatti, chairman and part owner of Tully’s, said.

Tully’s headquarter workers will also leave the building, being moved to offices above a Tully’s shop on Western Avenue.

The original “R” is on display at the Museum of History and Industry.

dempseySEATTLE — “Grey’s Anatomy” star Patrick Dempsey pulled out of his Tully’s Coffee business partnership Friday.

Dempsey filed suit in King County Superior Court Tuesday alleging his business partner, Michael Avenatti, took out a $2 million loan against their new company, Global Baristas, without telling the actor.

Dempsey and Avenatti bought the bankrupt Seattle-based Tully’s Coffee chain earlier this year.

According to the Puget Sound Business Journal, Dempsey said in the lawsuit that Avenatti borrowed the money to provide working capital for Global Baristas, the business set up to run Tully’s under the new ownership. The loan used Global Baristas’ assets as collateral, he said, according to the website.

Earlier Friday, a press release issued by Global Baristas said Dempsey and Avenatti had reached a tentative settlement to resolve their differences and dismiss the suit.

Hours later, a new press release said Dempsey “fully resolved” their dispute — by dissolving their business partnership and Dempsey leaving.

“Although Michael and I have dissolved our business relationship, I am happy to have been a part of the effort that brought awareness to the Tully’s brand.,” Dempsey said. “I wish the Company and Michael all the best.”

“I am happy that we have resolved our differences and have put this behind us, and I know we each wish the other well in our respective future endeavors.” Avenatti added, “The management team at Tully’s is extraordinary and the future for the company has never been brighter.  Great things are on the horizon for Tully’s and Seattle. “

In an affidavit filed in the lawsuit case, Dempsey had said, “My decision to become a member and manager of Global Baristas was based, in part, on Michael Avenatti’s representation that he would provide both the capital to fund the entire Tully’s acquisition and sufficient working capital to allow Global Baristas to operate the Tully’s Coffee stores once the acquisition was completed.

“Michael Avenatti never notified me that he intended to have or caused Global Baristas to borrow $2,000,000 for working capital, nor did he notify me that he planned to have or caused the company to pledge substantially all, if not all, of its assets to secure any loan.”

 

SEATTLE — Could a McDreamy double-shot Mocha be a drink headed to a Tully’s Coffee soon?

Possibly.

patrick dempseyThe Puget Sound Business Journal reported Monday that an investment group led by “Grey’s Anatomy”  television star Patrick Demspy finalized a deal to purchase and continue operating Tully’s Coffee Shops, a local coffee chain that filed for Chapter 11 bankruptcy protection in 2012.

The sale to Global Baristas LLC was closed late Sunday night and the price was not revealed. Dempsy and his group reportedly intend to retain all the store’s employees. The purchase of the coffee franchise took longer than expected, the Business Journal reported, because the two sides needed agree on dozens of obstacles that had held up the sale, and led to a Twitter dispute between the prior owners and the Global Baristas group.

Tully’s Coffee operates 47 stores in Washington and California.

dempseySEATTLE — Actor Patrick Dempsey and his investment group beat out Starbucks to win final U.S. Bankruptcy Court approval Friday to buy the Seattle-based Tully’s Coffee chain for $9.15 million.

“Today was a big day for us, and I’m thrilled that we prevailed,” Dempsey said. “From day one, we have been focused on saving jobs, keeping Tully’s independent and infusing new life and enthusiasm into the company. I’ve been deeply humbled by the outpouring of support from the city of Seattle and am very proud to be a new business owner in this amazing city.

“We have a lot to accomplish over the next few months and years,” he added, “and I am excited to now call Seattle my second home.”

The decision by Bankruptcy Court Judge Karen Overstreet to approve Dempsey as the new owner of Tully’s comes after an auction in Seattle Jan. 3, when Dempsey successfully out-bid six other suitors, including Starbucks.

Starbucks unsuccessfully sought Friday to convince the court that Dempsey’s bid should be rejected in favor of Starbucks’ bid, which, Dempsey said, would have resulted in store closures, job loses and less competition.

Dempsey, of the hit TV series Grey’s Anatomy, said he and his company, Global Baristas LLC, will save the jobs of about 500 people employed by Tully’s.

Tully’s, a 20-year old Seattle institution, filed for bankruptcy late last year, placing the company’s employees at risk for being laid off after the New Year. The company operates 47 locations in Washington and California with numerous other franchises across the country.

“We are anxious to get started and will immediately begin the process of putting our vision to revive the company into place,” said Dempsey. “I can’t wait to spend more time at the stores getting to know our employees and customers, and hearing what they have to say>”

On Jan. 3, when Dempsey out-bid Starbucks and the others seeking to gain control of Tully’s, the actor tweeted:   “We met the green monster, looked her in the eye, and…SHE BLINKED! We got it! Thank you Seattle!”

He was referring to Starbucks’ green mermaid logo.

On Friday, Jan. 4, Dempsey stopped in Tully’s shops in the Seattle area  and was greeted with cheers from employees. Dempsey said that when he found out he won the bidding war, it was one of the best days of his life.

“I come from a small town in Maine; it’s a coastal community. I find a lot of similarities here. I truly love the weather, I like the rain, I like the overcast and I like what’s going on here. It’s a great opportunity to spend more time here,”  he said.

Dempsey’s representatives confirmed on Dec. 26 that the actor was intent on leading a group of investors to purchase Tully’s Coffee.

Dempsey has strong ties to Seattle — beyond playing Dr. Derek Shepherd at the mythical Seattle Grace Hospital on the TV show “Grey’s Anatomy,” he previously raised close to a half-million dollars for Seattle Children’s Hospital and was honored for his efforts by the King County Council in 2010.

dempseySEATTLE — Bankruptcy judge ruled Tully’s bidding process will not reopen — Patrick Dempsey and Global Baristas win auction bid of coffee company.

bikini baristaSEATTLE — A coffee retailer that specializes in drive-thrus staffed with “attractive female baristas in entertaining costumes” intends to buy Tully’s Coffee at a bankruptcy auction, the Seattle Times reported.

According to the Times, Baristas Coffee plans to bid for the local coffee chain that includes 47 company-owned stores at an auction on Jan. 11.

Baristas Coffee, which is a publicly traded company, worked out a proposal to pay $1.5 million in cash for the stores and take on about $2.8 million in liabilities from the embattled coffee chain. The company will go up against one other confirmed bidder, a private equity firm that offered to pay about $1.25 million in cash for the chain.

But employees at local Tully’s Coffee stores might not be shedding clothing anytime soon. According to the Times, Baristas Coffee said it would continue to operate the stores under the Tully Coffee brand. And James Day, an attorney for Tully’s, questioned whether the Baristas Coffee could make a viable offer, the Times reported.

Baristas Coffee stock prices more than doubled on the news of its plans Tuesday, rising 1.6 cents to close at 2.8 cents.

SEATTLE — Tully’s Coffee Corp., which recently filed for Chapter 11 bankruptcy protection, is selling its chain of 47 coffee shops in Washington and California to Colorado-based Kachi Partners for $4.3 million, the company said Wednesday.

The sale is expected to be completed by year’s end. Tully’s filed bankruptcy in October.

Kachi will continue operating existing stores under the Tully’s name, the news release said.

“With this agreement in place with Kachi, we believe the business is positioned to emerge from this process in early 2013 and that we will be a much stronger company as a result,” said Scott Pearson,  CEO of TC Global Inc., which is the parent of Tully’s Coffee.

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