Judge: Tully's Coffee to go to Dempsey's group
SEATTLE (AP) - The auction for the beleaguered Tully's Coffee chain concluded Friday in federal bankruptcy court, with a judge approving the sale to an ownership group led by actor Patrick Dempsey.
Dempsey - dubbed "McDreamy" in the hospital drama "Grey's Anatomy" - had claimed victory last week after bidding concluded, but a company that teamed up with Starbucks to make an offer for Tully's filed an objection.
AgriNurture Inc. had said it was still willing to proceed with its combined bid with Starbucks Corp. of about $10.6 million. The bid from Dempsey's company, Global Baristas LLC, was for $9.2 million.
At a hearing Friday afternoon, Judge Karen Overstreet said the Jan. 4 auction was fair and no mistakes had been made.
Dempsey said he was "thrilled that we prevailed."
"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," he said in a statement. "We have a lot to accomplish over the next few months and years, and I am excited to now call Seattle my second home."
Starbucks spokesman Zack Hutson said the company respected the judge's decision.
Starbucks had wanted to buy about half of Tully's 47 shops in Washington and California and turn them into Starbucks stores, while the rest of the company would keep the Tully's name under the ownership of AgriNurture, which is based in the Philippines.
One reason Tully's owner TC Global Inc. didn't pick the Starbucks-AgriNurture deal was the complicated relationship Tully's has with Green Mountain Coffee Roasters Inc. Green Mountain owns the wholesale side of Tully's brand, which includes coffee in bags and single-serve packs that are sold in supermarkets and other stores.
Green Mountain preferred to keep the chain of coffee shops intact and operating under the Tully's name.
Lawyers for Tully's and its creditors also expressed concern about what would happen to some company contracts, including a multi-million dollar commitment to people who bought prepaid coffee cards.
At the conclusion of Friday's hearing that lasted several hours, Overstreet said the auction and the arguments presented by all sides were intricate, but it was not her job to second-guess the decision made by Tully's executives to accept Dempsey's bid.
"Was it complicated? Yes. Did it produce a fantastic result for this case? Yes it did," Overstreet said.
TC Global filed for Chapter 11 bankruptcy protection in October, citing lease obligations and underperforming stores. It has more than 500 employees.
CEO Scott Pearson said the sale, which is expected to close by the end of January, was a "step forward" for the company.
"I think the best part of it is we're taking care of our creditors and our employees and actually giving something back to our shareholders," Pearson said.
Dempsey has said he believes there is room in Seattle for Tully's and the much larger Starbucks, which is also based there.
After winning the auction last week, Dempsey made an appearance at a Tully's near Pike Place Market, shaking hands with workers and greeting customers before visiting other stores.
(Copyright 2013 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.)
1/11/2013 6:43:46 PM (GMT -8:00)
Dempsey - dubbed "McDreamy" in the hospital drama "Grey's Anatomy" - had claimed victory last week after bidding concluded, but a company that teamed up with Starbucks to make an offer for Tully's filed an objection.
AgriNurture Inc. had said it was still willing to proceed with its combined bid with Starbucks Corp. of about $10.6 million. The bid from Dempsey's company, Global Baristas LLC, was for $9.2 million.
At a hearing Friday afternoon, Judge Karen Overstreet said the Jan. 4 auction was fair and no mistakes had been made.
Dempsey said he was "thrilled that we prevailed."
"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," he said in a statement. "We have a lot to accomplish over the next few months and years, and I am excited to now call Seattle my second home."
Starbucks spokesman Zack Hutson said the company respected the judge's decision.
Starbucks had wanted to buy about half of Tully's 47 shops in Washington and California and turn them into Starbucks stores, while the rest of the company would keep the Tully's name under the ownership of AgriNurture, which is based in the Philippines.
One reason Tully's owner TC Global Inc. didn't pick the Starbucks-AgriNurture deal was the complicated relationship Tully's has with Green Mountain Coffee Roasters Inc. Green Mountain owns the wholesale side of Tully's brand, which includes coffee in bags and single-serve packs that are sold in supermarkets and other stores.
Green Mountain preferred to keep the chain of coffee shops intact and operating under the Tully's name.
Lawyers for Tully's and its creditors also expressed concern about what would happen to some company contracts, including a multi-million dollar commitment to people who bought prepaid coffee cards.
At the conclusion of Friday's hearing that lasted several hours, Overstreet said the auction and the arguments presented by all sides were intricate, but it was not her job to second-guess the decision made by Tully's executives to accept Dempsey's bid.
"Was it complicated? Yes. Did it produce a fantastic result for this case? Yes it did," Overstreet said.
TC Global filed for Chapter 11 bankruptcy protection in October, citing lease obligations and underperforming stores. It has more than 500 employees.
CEO Scott Pearson said the sale, which is expected to close by the end of January, was a "step forward" for the company.
"I think the best part of it is we're taking care of our creditors and our employees and actually giving something back to our shareholders," Pearson said.
Dempsey has said he believes there is room in Seattle for Tully's and the much larger Starbucks, which is also based there.
After winning the auction last week, Dempsey made an appearance at a Tully's near Pike Place Market, shaking hands with workers and greeting customers before visiting other stores.
(Copyright 2013 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.)
1/11/2013 6:43:46 PM (GMT -8:00)
Like we need another Starbucks, glad this turned out the way it did!
Anything Starsucks doesn't get its paws on is a win.
Sounds like the new ownership will be off to a good start by keeping the same employees, stores and honoring all previous deals. With "Dr. McDreamy" as the face of ownership I bet Tully's will give Starbucks a run for their money now. You just never know when you might run into him in one of the stores. I never watched Grey's Anatomy but I think I should have....never realized how handsome he is and he has a lot of fans!
AgriNurture, sounds like a company name that could someday come out with something called Franken Coffee..
 @swimbad Or perhaps Frahnkenbean?
 @Gravity Works!  @swimbad Dr. Frederick Frankenstein: "You know, I'm a rather brilliant surgeon. Perhaps I can help you with that hump."
Â
Igor: "What hump?"
"Starbucks had wanted to buy about half of Tully's 47 shops in Washington and California and turn them into Starbucks stores..."
They are never satisfied and want to monopolize every single coffee business everywhere. Â
GREED...
Im so glad they didn't get this one too!
Just give me a good bean, well roasted, low acid. Arabica beans. Don't give you the jitters and the coffee tastes good chilled. I'll grind and brew my own coffee. Much cheaper than $tarBuck$ and **much** tastier!
@Gravity Works! I agree, never liked starbucks. In Silverton, you go to starbucks $1.70 a cup for small. Go to McDonalds less than a dollar and tastes a lot better. Hate the food, but, their coffee is good.
Good, I don't like starbucks anyways!
 @goldie I always thought their Mermaid logo looked like someone holding two pistols to their head. :-P