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Subscribe to RSSTV doctor and actor, Patrick Dempsey, has apparently beat out Starbucks to buy Seattle-based Tully's Coffee, a bid Dempsey says will retain the company's jobs. Cnbc's Jane Wells reports.
Too much coffee can make anybody a little giddy.
Patrick Dempsey, best known as Dr. Derek “McDreamy” Shepherd on medical drama "Grey's Anatomy," sent out a celebratory Tweet late last night after his investment group made the highest single bid for Tully’s Coffee in a Seattle bankruptcy auction. “We met the green monster, looked her in the eye, and...SHE BLINKED! We got it! Thank you Seattle!” he wrote.
The “green monster” is Starbucks, and either it or the bankruptcy judge who still has to approve the deal at a hearing next week could throw a wrench into Dempsey’s white knighthood.
The investment group of which Dempsey is a member, Global Baristas LLC, beat out the other six bidders, including the coffee giant, with an offer of $9.15 million for the 47-store chain. In a statement, Scott Pearson, CEO and president of Tully’s parent company TC Global, Inc., called the auction outcome “a big win for Seattle.”
Tully’s, which filed for bankruptcy in October and closed 19 stores, has more than 500 employees. Dempsey said preserving those jobs was a top priority. “I’m thrilled that we won and I’m even more excited about saving Tully’s Coffee and its hundreds of jobs,” he said in a statement. “I am honored to have the privilege to own Tully’s.”
But his grand plans and talk of ownership are a little premature. “On its face, Dempsey won because he outbid everybody else, but they haven’t won yet,” said Anthony Michael Sabino, a bankruptcy attorney who specializes in corporate restructuring.
Global Baristas still has to get through a hearing on Jan. 11 and have a bankruptcy judge verify that its bid is the highest and best. “The reasonable expectation is very high that the Dempsey group will be the new owner of Tully’s, but it’s not an absolute certainty yet,” Sabino said.
One roadblock could be Starbucks. “We’ve made an offer for 25 locations and another bidder made an offer for all of the remaining assets and the combined amount of our bids is $10.56 million,” said spokesman Zack Hutson, who added that even though the auction is over, the judge hasn’t made her decision yet.
With a bid nearly $1.5 million higher than Global Baristas, Starbucks or the unnamed second bidder could challenge the results of the auction in next week's hearing. "We're evaluating our options," Hutson said.
Sabino said price isn’t everything in bankruptcy sales, though. “The quality of the bid can sometimes overcome higher [ ones],” Sabino said. The bankruptcy court has to weigh a variety of factors besides the dollar amount, such as how much of an offer is cash or assumption of debt versus equity, how quickly the deal is likely to close, whether or not there is likely to be any regulatory review that could delay the sale and which buyer’s plan for the company’s future will benefit stakeholders the most.
A Global Baristas spokesperson said via email it was confident it would prevail at the hearing “because of the loss of jobs and breakup of company if others were chosen.”
Hutson countered by saying Starbucks also would keep jobs. “If our bid is accepted along with the companion bid, we intend to invite Tully’s employees at the locations we acquire to apply for positions with us,” he said, adding that current Tully’s employees would get preference as long as they met Starbucks’ job requirements.
Despite his onscreen ability to resuscitate the ailing, Dempsey doesn’t have a background in corporate turnarounds, and he began making plans to buy Tully’s only about a week before Christmas. He seemed eager to get involved, sending out Tweets throughout the day on Friday chronicling his visits to different Tully’s shops. “Heading to Clyde Hill Tully's now to meet employees and our customers. Very exciting,” he wrote.
“I will be making Seattle my home away from home and spending a significant amount of time in the community,” he pledged.
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Good for them! Starbucks has the worst coffee, I don't know how people pay so much for such over-roasted swill. Your local coffee purveyor knows better.
Tully's is heads and shoulders above Starbucks, there are two stores that are in my regular coffee shop rotation.
I have had BOTH.
If you want GOOD coffee you buy Tully's.
If you want to try and convince everyone you are cool, you carry the other companies overpriced cups.
Tully's has always been one of my favs and I was sad to learn about the bankruptcy. I remember when Starbucks purchased Seattle's Best and The Coffee People and basically shut down most stores. Some jobs were saved, but this deal, if upheld, will allow Tully's to remain as is while plans are made to make the company successful. In Starbucks defense, they do offer good working conditions and benefits to their employees. I just want to still be able to find a Tully's store and that won't be possible under Starbucks.
I like both Starbucks and Tully's. So good to keep the variety available to suit all the different tastes and preferences.
Exactly. Even though this deal is best for all in that it will keep jobs, let's lighten up on Starbucks. I get very tired of the anti-Starbucks crowd. All Starbucks is did is build a socially and environmentally conscious business, have an effect on living standards on third world countries, give us lots of clean and attractive spots to hang out and market a CONSISTENT product. Don't like dark roasts? Don't buy them. There are a hell of a lot worse companies than Starbucks. Cut them a break.
I agree although I don't usually go to either. What I do dislike are all of these whiny little punks slamming Starbucks. For a retail company, there is NO other company that even comes close to treating their employees as good as Starbucks does nor any that make an honest attempt to invest where they buy their coffee and try to buy "fair trade" coffeee. It is all these whiny little bitches on this site that live in their mother's basement that annoy me.
I like the idea of Tully's remaining as is......for the employees, for the customers and for the joy of keeping monopolies at bay........
Thank you Mr. Dempsey!..........compared to Starbucks Tully's is the little guy and keeping the small independent businesses small and independent from the monopolies is a great service to capitalism............long live the spirit of competition.
Starbucks coffee is ok, I think Tully's is better and I have been disappointed in the service at Starbucks A LOT MORE times than I ever have at Tully's.
Keep that small town neighborly feeling alive and well....you always find it at Tully's.
Like both companies - we need competition and the fact they are saving those jobs makes me a happy coffee drinker.
McDreamy can be McCoffee or McCreamy for everyone today.
What's the reason that Tully's went bankrupt?? Hope Mr. Dempsey understands what the problem was and has a plan to fix it, or we'll see in bankruptcy court in the near future.
Thank you Mr. Dempsey, I'm in your corner, I really hope you come out a winner and save all those jobs! Wish there were more people with money that could secure failing companies and keep people working.
With no expertise in running a business, or in the coffee business, Tully's would not last another 6 months. By then, most of those 500 employees will have moved to Starbucks or lost their jobs.
What should determine the winner would be the ability to show that there is at least a one year reserve of cash to keep the operation going, and there also needs to be some sort of plan that shows they can turn it around. Vauge hopes that things will get better are a receipe for disaster. They cannot keep those 500 employees if they keep bleeding cash, at least, Starbucks has a future and many if not most of the employees will have a secure job.
Doctor McDreamy --- the anti-Emperor McRomney.
McRomney would break up the company, have the coffee brewed in China and sent - frozen - back to the U.S. to be microwaved by the customer himself.
i hope he keeps the tully's here at fry's in 'city of maricopa" az and does not let it go to starbucks. i have been going to tully's for 2 plus years and have bought a tully's'mug and get a 0.95 refill which helps as i am retired. if this tully's is closed or made a starbucks i will go to other coffee shops in city of maricopa az. nothing againest starbucks but when ur retired pinching abe lincoln is a must.
Anyone who thinks Starbuck's is a good company or patronizes them should take a look at the link below. Snopes verifies that Starbucks actually charged for requests for water from 9/11 first responders and victims. If you do an internet search worded "Starbucks charges for water during 9/11" you will find a multitude of hits all confirming this absolutely abhorrent behavior. I have not set foot in a Starbuck's since that day and I live in the Puget Sound region. Kudos to Patrick Dempsey and his group for rescuing Tulleys from Starbucks and giving us an alternative to Starbucks' corporate greed and insensitivity!
http://www.snopes.com/rumors/starbucks.asp
I have had Starbucks coffee twice in the past since they opened.
I agree, that if you like your coffee really STRONG and have the need to show how 'hip?' you are, you're an over-paying Starbucks customer. There is nothing wrong with that.
It just doesn't suit my taste or wallet.
it's better for someone other than Starbucks to get this coffee chain, since starbucks coffee isn't that great, except they have more market.
we really do need some different tasted and better coffee shops around the country with different styles and ideas on coffee serving, along with some healthy deserts, gluten free foods served in their shops, rather than those high cal stuff in Starbucks shops
Does anyone care that Tullys has limped along for the last dozen years under one incompetent CEO after another? One CEO came from the Sonics, one came from a franchisee (conflict of interest? - and walked away with a sweet deal), and the current one who drove the final nail had NO experience in the field (sorry, bottled water doesn't count). Good luck to the new owners, time to clean house and bring in some professionals! Tullys is a great brand in spite of the amateur way it has been run over the years.
Well once it clear the court and creditors, the hard part starts. That is making it a profitable operation. So for now the jobs are saved. The future will see if this is permament or not.
The coffee is over priced. Patrick Dempsey is no business person. He will find himself in the same situation he doesn't revamp the stores and lower prices. The coffee would still be expensive at 50% less.
Who...cares...
Save Tullys from Tullys
Just another celebrity with big money and a new toy to play with.
And Tully's is just another overpriced coffee joint like Starbucks. The people of Seattle deserve to be fleeced. They should know better.
Nothing beats Mo's coffee around the holidays. Mmmmmm...good!!
Love Tully's! I was so sad when the two stores on my way to work closed. I am a loyal Starbucks fan as well, but I like variety! I'm hoping P.D. can really turn this ship around and help revitalize Tully's, because I would be so sad to see them go. As for the comment by Clarence24 above - you get what you pay for. ALL of the good coffee shops (independent AND chain) have similar prices. You can tell the difference in quality from the little stands that sell cheaper coffee. Yes, some of us DO know better ;).