Author: cohen

MTY’s Offer for Gigi’s Cuts Value to $2M

BY BETH EWEN
FRANCHISE TIMES


Gigi’s Cupcakes filed for Chapter 11 bankruptcy protection in January.

The last time Gigi’s Cupcakes changed hands, in 2016, the franchise founded by Gina Butler sold for $6 million to Key Corp. and its affiliate Fund Corp. Now MTY Franchising USA is offering $2 million cash, and Gigi’s is seeking additional qualified bidders before a planned March 25 auction date.

MTY will also assume certain liabilities if the sale closes, according to a February 22 filing as part of Gigi’s Chapter 11 bankruptcy case. Gigi’s assets are $4.4 million and liabilities are $11.98 million, according to the filing.

MTY Food Group is the Montreal-based company whose biggest acquisition to date was in 2016, when it bought Kahala Brands for $310 million. It owns casual dining, fast casual and quick-service restaurants operating under more than 70 brand names.

The filing says Gigi’s needs to be sold because of its debtors’ “lack of short- and long-term liquidity,” and because the termination date for the use of Equity Bank’s cash collateral is March 31.

Gigi’s and a sister company, Mr. Gatti’s Pizza, borrowed a total of $30 million from Equity Bank in two loans last June. After both brands filed for Chapter 11 bankruptcy protection in early January, the court approved the temporary use of the collateral held by Equity to keep operations going.

In an e-mail February 25, Dawn Ragan, chief restructuring officer for Mr. Gatti’s and Gigi’s Cupcakes, took issue with my articles about Gatti’s/Gigi’s in January and March, saying there are “egregious mischaracterizations of the facts.”

“In order for you and your publication to not continue to misrepresent or misstate the facts, including by relying on one-sided information you ostensibly receive from plaintiff’s counsel,” she continued, “I would suggest you reach out to me going forward prior to further publications, so that I have the opportunity to correct the record before printing inflammatory statements regarding Gatti’s or Gigi’s or referenced litigation.”

She wrote she would try to prepare a statement regarding the debtor’s position, but hadn’t sent it as of this posting. Ragan didn’t immediately return a phone call for comment on this article.

The Feb. 22 filing says, “Given the debtors’ current liquidity constraints, the debtors believe that a prompt sale process is the best way to maximize the value of the assets for the benefit of the debtors’ estates, creditors and other stakeholders.

“Because the debtors are required under the final cash collateral order to sell Gigi’s assets by March 31, 2019, any delay in the sale process will jeopardize debtors’ ability to maximize value for the benefit of all creditors.”

Gigi’s, Mr Gatti’s bankruptcy filing begs $30-million question

BY BETH EWEN
FRANCHISE TIMES

Beth Ewen
ILLUSTRATION BY JONATHAN HANKIN

Jeffrey Cohen, an attorney representing 18 Gigi’s Cupcakes franchisees in ongoing litigation, is on the hunt for $30 million. That’s the amount borrowed in two loans from Equity Bank last June—$20.2 million by pizza restaurant franchise Mr. Gatti’s and Sovrano, its parent company, and $9.2 million by Gigi’s Cupcakes, the cupcake franchise purchased by KeyCorp and its affiliate FundCorp in 2016.

Both loans are dated June 28, 2018. A bit over six months later, on January 4, 2019, the three debtor firms claimed “a liquidity crisis” in a Chapter 11 bankruptcy filing and petitioned the court to use cash collateral held by Equity Bank. The filings said the companies needed “immediate access to its cash to pay employees and to pay for ordinary operational expenses.”

Cohen, of Cohen Law in Denver, is trying to track down the money. “It’s a term loan, not a line of credit,” he said. “What happened to the cash? I know Gigi’s is losing money, but it’s not losing $1.5 million a month.”

KeyCorp is the venture capital firm that bought Gigi’s in April 2016 via an affiliate called FundCorp, whose principal is Jim Phillips. Sovrano, which bought Mr. Gatti’s in 2015, is also listed as an affiliate of FundCorp. Neither KeyCorp nor FundCorp is listed as a debtor on the January 4 bankruptcy filing.

“I have a feeling, and I’ve brought it up, that the money went upstream to KeyCorp, who is the owner, and Jim Phillips, the major principal,” Cohen alleges. “This $30 million that went upstream—so they sucked the money out of the companies and they put them into bankruptcy?

“That’s what I strongly suspect,” Cohen continues. “It doesn’t seem that Gigi’s is going to borrow $9 million in June and claim it’s insolvent six months later.”

KeyCorp follows Chapter 11 path

On January 25, 2019, another shoe dropped in the case: KeyCorp filed for Chapter 11 bankruptcy protection and asked for an immediate stay to all litigation. Listed as the creditors are 18 entities, the same franchisees Cohen is representing in litigation dating back to late 2017 and claiming fraud by Gigi’s, Gigi’s founder Gina Butler, early Gigi’s investor Alan Thompson and KeyCorp, among others. Absent from the KeyCorp Chapter 11 filing is any mention of FundCorp., the affiliate named as the entity controlling Gigi’s.

“So I don’t know what these guys are up to. It appears, just as a working hypothesis, that they transferred all the assets out of the KeyCorp into FundCorp or somewhere. Who knows? They looted the company altogether,” Cohen alleges.

Facilitating ‘a quick turnaround’

I always try mightily to get all sides of the story to comment, but no one associated with the debtors would reply. Deborah Coldwell of Haynes and Boone, the outside attorney representing KeyCorp. and the related parties, emailed she does not comment on ongoing litigation.

Michael McConnell of Kelly Hart & Hallman, the outside attorney for the debtors in both bankruptcy filings, referred via a spokesperson my request for comment to Jack Strother, general counsel of Mr. Gatti’s Pizza and Gigi’s Cupcakes. Strother did not return phone calls seeking comment.

Documents in the Mr. Gatti’s/Gigi’s Chapter 11 filing say it will “facilitate a quick turnaround and improvement in liquidity in order to create a fiscally stronger enterprise.” The debtors’ filings “are the result of a combination of factors stemming from the acquisition of the Gigi’s brand in 2016, leverage undertaken in connection with acquisition and growth of both brands, and operating losses at certain stores.”

The litigation surrounding Gigi’s shows how an acquisition can go terribly south. KeyCorp touted its purchase of Gigi’s from Butler and Thompson in April 2016. At the
time, Butler herself said in a statement she was “so excited about FundCorp leading the way for Gigi’s Cupcakes. We now have the opportunity to experience tremendous growth.”

By October of 2016, however, KeyCorp sued Gigi’s Holdings, claiming its management, including Butler and Thompson, misrepresented the health of the franchise system. After the purchase, the lawsuit said, KeyCorp learned of 32 locations that had threatened to close or leave the franchise system, “which is six times the number that defendants disclosed.” KeyCorp alleged that damages “exceeded $1.4 million,” and had they known, they “would not have completed the transaction using the same valuation methodology…and very well may not have completed the transaction at all.”

In an interview last June, Butler told me the aftermath of the sale has been difficult. “It’s been really hard. You birth a baby and you put it into someone’s hands and you trust them,” she said. “Your name and your face is on it. The hate mail—and the fan mail—still comes to me,” she said, adding she’ll get a note when a store in Milwaukee, say, runs out of a certain type of cupcake. “I’m still the face” of the brand. Early this year, she sent a mass email about an upcoming celebration at a Gigi’s store.

‘There will be answers’

The lawsuit filed by KeyCorp against Gigi’s et al. settled shortly after it was filed, Cohen said, but Cohen attached it to his complaint filed September 2018 on behalf of the franchisees. “It shows that there was underlying fraud” because that was KeyCorp’s claim against Thompson and Butler. Franchisees were “defrauded as well,” he claims, overstating the earnings and understating the expenses “in a substantial way.”

He will continue pursuing the lawsuit against Butler, Thompson, FundCorp and the others, and is working to schedule depositions in the bankruptcy cases. “We’d like to get Jim Phillips himself, because he’s the guarantor on that $9 million in debt,” Cohen says.

“It’s mysterious,” he says about the hunt for the missing money, but he is resolute. “There will be answers, and I’m sure they won’t be good.”

Beth Ewen is editor-in-chief of Franchise Times, and writes the Continental Franchise Review® column in each issue. Send interesting legal and public policy cases to bewen@franchisetimes.com.

Gigi’s Founder Tries Again With Kitchen Products Rollout

BY BETH EWEN
FRANCHISE TIMES

Gigi Butler, founder of Gigi’s Cupcakes, is rolling out a new line of kitchen textiles.

Gigi Butler is aiming to bounce back from trouble at her eponymous franchise, Gigi’s Cupcakes, now rolling out a new kitchen textile line.

“This is such a special launch for me because, as you may know, there is nothing I love more than being in the kitchen. It is truly my happy place,” she writes in an email today announcing the launch.

Kitchen towels, pot holders, coasters and tote bags make up the line, all with sassy sayings like “Let’s bring sexy back in the kitchen,” and “Bake someone happy.”

Gigi’s Cupcakes is in now in bankruptcy court, filing Chapter 11 in January, and is up for sale. In an interview last June, she told Franchise Times about her disappointment after selling her franchise in 2016 to KeyCorp and Fund Corp.

“It’s been really hard. You birth a baby and you put it into someone’s hands and you trust them,” said Butler, who sold 100 percent of her cupcake chain. A lawsuit by KeyCorp against Butler and early investor Alan Thompson was settled, but both are named in pending lawsuits by 18 franchisee groups.

Last June, Butler said she was working on her next chapter, including publishing a book titled “The Secret Ingredient,” backing a line of kitchen cabinets and recording a TED talk with the theme: “Sweet dreams die hard.”

Butler’s back story—broke cleaning person and aspiring country singer-turned Gigi’s founder with only $300—is still relevant today, and she still has big aspirations, she said last June. “I’m now re-building my brand,” she said, emphasizing the “my.”

Denver developer sues United Western Bank

By Margaret Jackson
The Denver Post

Posted:   12/18/2010 01:00:00 AM MST
Updated:   12/18/2010 01:20:02 AM MST

Developer Jon Cook is suing United Western Bank, claiming the lender defrauded him when it misrepresented its ability to renew loans for one of his development projects.

Cook and the bank had reached an agreement June 8 to increase loans secured by property west of South Broadway and West Jewell Avenue and renew them for two more years, according to the lawsuit filed this week in Denver District Court. The loans had matured May 29.

Cook plans to develop the property, part of the 6 acres he has assembled known as the Lumberyards, with housing, offices, retail and restaurants.

But Cook didn’t know that the bank would not be able to honor the agreement because the federal Office of Thrift Supervision was about to put United Western under a “cease and desist” order, knowledge his lawsuit alleges the bank had.

The order, among other things, required the bank to boost capital levels by June 30, stop offering above-market-rate products aimed at attracting short-term money from outside the state, and reduce its concentration of construction and commercial real estate loans.

Both Cook and attorney Jeffrey Cohen declined to comment on the lawsuit.

Ted Abariotes, general counsel for United Western, said the bank does not comment on pending litigation. It has not yet filed a response because not all the parties named in the lawsuit have been served, he said. The suit also names bank executives Gary Petak, Bret Duston and Anthony Codori.

Cook took out two loans totaling $6 million on the property. Under the June 8 agreement, the bank agreed to increase one of the loans by $2.5 million. The deal was essential to Cook’s plan to develop and sell the property to fully pay off the loans, according to the lawsuit.

In exchange for the renewals and increase in loans, Cook paid the bank $155,378 to bring current all interest due.

The bank “misrepresented to Mr. Cook and Lumberyards that it would renew and increase the Bank loans in order to obtain the $155,378.01 by false pretenses, thereby allowing the Bank to present a false picture of its financial standing and condition to the OTS,” the lawsuit states.

The bank in recent months has had some success in efforts to recapitalize.

In October, three outside investors said they would inject $103 million in capital into the bank. Affiliates of private-equity funds Lovell Minnick Partners and Oak Hill Capital Management plan to invest $47 million each by buying 117.5 million shares of United Western common stock at a price of 40 cents per share.

Additionally, Ric Duques, former chairman and chief executive of First Data Corp., committed to purchase 22.5 million shares for $9 million.

The investments require United Western to raise another $97 million in a private placement. It must also complete the purchase announced in June of Legent Clearing, a company Duques controls.

Margaret Jackson: 303-954-1473 or mjackson@denverpost.com

Pounded over an ounce

By Al Lewis
Dow Jones Newswires

Posted:   01/07/2009 12:30:00 AM MST

A mystery shopper hit a Quiz nos sub shop in Coop ersburg, Pa., in September 2006. He bought a Prime Rib Philly Cheesesteak, took it to some secret lair and weighed the meat.

This toasted sub was supposed to have 5 ounces of meat. But it had only 4 — or so the mystery shopper would report back to corporate.

This alleged 1-ounce meat deficit would prove the end for Richard Piotrowski, 49, and Ellen Blickman, 51, the husband-and-wife team that had owned the Coopersburg franchise.

In October 2006, the Denver- based franchiser sent them a notice terminating their franchise. The couple and Quiznos have been suing each other — over this 1 ounce of missing meat — ever since.

On Dec. 31, a Denver judge ruled in favor of Piotrowski and Blickman, awarding them $349,797, after a five-day trial in early December.

The judge also ordered Quiznos to pay the couple’s legal costs, which total $350,000, said Jeffrey Cohen, the Denver lawyer who represented Piotrowski and Blickman.

In his order, Denver District Court Judge Morris B. Hoffman called Quiznos’ meat-weighing methodology “laughably unreliable.”

In eight months of owning a Quiznos store, Piotrowski and Blickman served tens of thousands of sandwiches.

“But this was about 1 ounce, on one sandwich, on one day,” Cohen said.

Quiznos executives, however, told me they warned franchisees in advance that mystery shoppers would be coming to weigh the meat and that it was critical they get it right, because competitors were watching too.

Quiznos chief executive David Deno said he disagrees with much of what the judge said in his order but that he hasn’t decided whether to appeal or pay the judgment. He was not involved with Quiznos in 2006 and was named CEO only in September.

“We want to work together with our franchise partners to grow a great system,” he said. “Litigation is not the answer.”

The judge concluded that Quiznos took its hard line to back up its boast in national advertising that it had “more than twice the meat” of a Subway sandwich.

The chain sent mystery shoppers to most of its more than 4,500 stores, fearing Subway would do the same. Of those, 300 received default or termination notices.

Almost all Quiznos franchise owners who received default or termination notices were given a chance to cure them. But Piotrow ski and Blickman had threatened a news conference to expose how Quiznos was treating them.

This irked Quiznos’ then general counsel, Michael Daigle, who testified that he treated them differently.

Despite Quiznos’ aggressive efforts to ensure sandwich-weight compliance, Subway sued the company anyway, and that suit is still pending.

“This was a bullying tactic,” Piotrowski said. “The message was, ‘We can put you out of business. We can just destroy you on a whim.’ ”

Meanwhile, when you consider Quiznos’ own legal costs and the 24 percent interest it’s been ordered to pay on the judgment, the tab on this 1 ounce of missing meat has got to be topping $1 million.

How’s that for a toasted sub?

Al Lewis: 201-938-5266 or al.lewis@dowjones.com

Denver-based Quiznos hit by new lawsuits from disgruntled franchisees

By Steve Raabe
The Denver Post

Posted:   03/17/2013 12:01:00 AM MDT
Updated:   03/17/2013 12:54:34 PM MDT

Analysts say franchisees’ friction with Quiznos has created a debilitating spiral of closures and falling revenue. (RJ Sangosti, The Denver Post)

Quiznos’ long-standing friction with disgruntled franchisees has surfaced again in a new round of lawsuits.

Since December, 10 suits have been filed in Denver District Court, alleging that the Denver-based sandwich chain has treated its restaurant owners unfairly.

The claims are similar to those in a long history of related legal actions — that the company has taken actions to increase corporate profits at the expense of franchisees who are struggling to break even.

Analysts say the new legal disputes signify more problems for a chain already beset by declining sales, store closures and stiff competition in the sub-sandwich sector.

The latest lawsuits come three years after Quiznos agreed to a $95 million settlement with 6,900 class-action franchisees who said the company overcharged them for supplies and failed to provide adequate marketing support.

In the new round of lawsuits, store owners claim Quiznos continues to overcharge by forcing them to buy food at marked-up prices from a Quiznos-affiliated supplier.

“The hidden mark-ups, which are the keystone of Quiznos’ scheme, have generated massive profits for Quiznos while simultaneously driving its franchisees to financial ruin,” one of the lawsuits says. Most of the suits contain similar or identical language.

The lawsuits allege that Quiznos management increased the use of coupons for free and discounted food — costs that are absorbed by restaurant owners — in order to make the franchisees buy more food at marked-up prices from Quiznos’ supply affiliate.

Denver attorney Jeffrey Cohen, representing the franchisees, said he would offer no additional comment.

Quiznos issued a brief statement and said it would not comment further.

The statement reads: “We believe that these lawsuits are completely without merit. Quiznos management team will not allow these lawsuits to distract us from our mission. We remain committed to delivering a premium product and experience to our guests, and helping our franchise owners grow their sales and profits.”

Named as defendants in the suits are a number of Quiznos corporate entities, including its franchising arm; the supply affiliate; the company’s majority owner, investment fund Avenue Capital Group; and former owners Richard E. and Richard F. Schaden.

Franchisee John Portrera of Petoskey, Mich., a longtime critic of Quiznos’ management, said he shut down his restaurant Dec. 31 after 4½ years because of mounting losses and resulting personal turmoil, including a divorce.

“What they’re doing is criminal,” he said. “I lost my savings. I lost my wife. I cashed in my life insurance policy. I lost everything, but now I’m so happy just to be out of it.”

Portrera said that even though his restaurant was rated highly by Quiznos in categories such as customer satisfaction and cleanliness, he lost about $400,000, including his initial investment and operating losses.

Disputes between franchise companies and their franchisees are relatively common, but few have the persistence and animosity as Quiznos’.

For example, Burger King restaurant owners sued the parent company in 2009, arguing that they were losing money by being forced to sell some menu items for $1. The suit was settled 17 months later, with both sides saying they would collaborate on future pricing decisions.

Analysts say Quiznos’ friction with franchisees has created a debilitating spiral of store closures and declining revenue.

“The sales decline and the heavy couponing have really made it tough for franchisees to make a profit,” said Jonathan Maze, an analyst and writer for Franchise Times magazine. “Quiznos charges a lot of money (to franchisees) for its food.”

University of Denver finance professor Mac Clouse said some restaurant chains with franchise supply agreements use their buying power to acquire food at low prices, and then pass the savings on to franchisees.

Yet the lawsuits claim that Quiznos has taken the opposite approach — using economies of scale to negotiate low prices for bulk-food purchases, then reselling the food at higher prices to restaurant owners.

Quiznos is privately owned and is not required to report financial results to the Securities and Exchange Commission. However, some of its performance metrics can be found in franchise disclosure documents that the company is required to file in some states.

The documents show that Quiznos collected much more money from selling food and supplies to franchisees than it took in from royalties based on sandwich sales.

The supply company, American Food Distributors LLC, which Quiznos describes as an “affiliate,” had 2011 revenue of $225.3 million. Quiznos’ franchise operation, QFA Royalties, collected 2011 royalties and fees of $73 million from franchisees.

The disclosure documents show that the chain’s number of stores fell from 4,381 in 2009 to 2,834 in 2011, a decline of 35 percent over two years. At the peak in 2006, there were more than 5,000 outlets.

Total revenue for QFA Royalties has plunged 41 percent in two years, from $123 million in 2009 to $73 million in 2011. Net income declined by a similar margin in that period, from $47.7 million to $28.4 million.

“Quiznos has struggled, primarily because they’re in an intensely competitive market,” said Darren Tristano, executive vice president of food-service analysis firm Technomic.

“It’s always been a difficult relationship between the parent company and the franchisees,” he said. “It seemed as though they had gotten past that (with past settlements), but now they’re battling again.”

Steve Raabe: 303-954-1948, sraabe@denverpost.com or twitter.com/steveraabedp

Roach Motel of investing

By Al Lewis
The Denver Post

Posted:   04/04/2008 01:00:00 AM MDT
Updated:   04/04/2008 03:37:02 AM MDT

Denver lawyer Jeffrey Cohen recently took $75,000 of his firm’s money to TD Ameritrade to hold in a money- market account.

He said a TD Ameritrade employee told him the money market wasn’t paying well so why not invest in auction-rate securities?

These are essentially long-term bonds that trade in weekly auctions. Brokerages have long been telling clients they are just as safe and liquid as the money markets, only they pay more.

Cohen was so pleased, he came back a few weeks later with another $25,000.

“I called the bond desk at TD Ameritrade,” Cohen said, “and the guy there said, ‘You can get in, but I’m not quite sure you can get out.’ I said, ‘What do you mean I can’t out?’ He said: ‘Yeah, you can’t get out. There are no more auctions. The auctions failed.’ ”

No auctions. No bond sales.

“It’s like the Roach Motel,” Cohen said. “Money can go in, but it can’t come out.”

Cohen isn’t alone. Moody’s Investors Service estimates that mutual funds, institutional investors and even a few little guys hold more than $300 billion in supposedly safe auction-rate securities, many of which are now frozen because nobody shows up for the auctions anymore.

Class-action lawsuits are flying. One filed this week claims Merrill Lynch “deceptively marketed (auction-rate securities) as cash alternatives to money-market funds.” Morgan Stanley and others face the same allegations.

William Loehman, a dog-kennel operator in Fort Collins, said his A.G.

Edwards/Wachovia Securities broker put $300,000 of his hard-earned money into securities backed by Missouri Higher Education Bonds.

“These securities were sold to me as a safe, liquid money-market alternative,” he said. “My wife and I are semiretired, self-employed people who depend on our investments for living income.”

Now Loehman is stuck, but if cash gets tight, he can get a loan.

“Wachovia Securities is working diligently on solutions to this industrywide problem, seeking to return liquidity to our clients as quickly as possible,” Wachovia spokesman Justin Gioia said. “As an interim solution, we are providing loans against clients’ securities to assist them in meeting immediate needs.”

A TD Ameritrade spokeswoman declined to comment.

On the other end of these failed auctions are municipalities and authorities — including Denver International Airport, Children’s Hospital, the CollegeInvest Student Loan program and the E-470 toll road. Unable to trade, they are now getting smacked with higher interest payments.

Many of the underlying assets of auction-rate securities are top- rated municipal and corporate bonds. They’re not supposed to go sour. But if nobody buys them, what are they worth?

What began as a few defaults in subprime loans has spread to a full-blown credit crunch.

The Federal Reserve Bank is giving emergency loans to investment banks but can’t bail out everybody.

What we learn in these desperate times is that many of the complex financial tools and markets that Wall Street creates are really just Roach Motels. But even Roach Motels can be useful.

Black Flag, maker of the Original Roach Motel, advises: “Roach Motel will tell you if you have a roach problem and how bad it is.”

Respond to Al Lewis at blogs.denverpost.com/lewis, 303-954-1967 or alewis@denverpost.com.

Jefferson County Commissioners Said to Discuss Bankruptcy

Bloomberg  –  By Martin Z. Braun and Kathleen Edwards

July 21, 2011 — 1:27 PM MDT

Jefferson County commissioners are meeting today with lawyers to discuss bankruptcy, according to a county staff member with direct knowledge of the talks.

Officials of the Alabama county are considering hiring Kenneth Klee, according to the person, who asked for anonymity because the discussions are private. Klee represented Orange County, California, in its 1994 bankruptcy, which was the largest municipal filing. Commissioners are also meeting with Jeffrey Cohen, a Denver-based lawyer with Patton Boggs LLP, the person said.

A bankruptcy filing isn’t imminent, Klee said in an interview after the meeting in Birmingham. The county should continue to pursue a negotiated settlement until its reserve is spent, he said.

“A good settlement bargained in the shadow of Chapter 9 is best for the county,” said Klee, referring to the section of the U.S. bankruptcy code that governs municipal bankruptcy.

A filing by Jefferson County, whose creditors hold more than $4 billion in bonds, would break Orange County’s record.

The county, home to Birmingham, the state’s largest city, has spent more than three years in fiscal distress after a $3 billion sewer-bond refinancing collapsed during the credit crisis. Its woes were compounded when the Legislature refused to act after a court struck down an occupational tax in March.

Heading to Court

Before today’s meeting, Commissioner Sandra Little Brown put the odds of bankruptcy as 80 percent.

“We’re at the end of our rope and have exhausted all our options,” she said. She didn’t comment after the meeting.

Cohen declined to comment when reached by telephone.

Last month, the county, creditors led by JPMorgan Chase & Co., and a court-appointed receiver agreed to a 30-day respite to pursue a settlement to the debt crisis. Governor Robert Bentley said he would help broker a deal.

The county has proposed cutting the amount of debt it must repay to about $2 billion and agreeing to sewer-rate revenue increases of 8 percent for the next three years. The state would create a public utility to issue new bonds backed by sewer revenue and enhance the creditworthiness of the debt.

Previously, holders of the sewer debt and companies that insure the bonds proposed the county issue as much as $2.4 billion in refinancing bonds and raise sewer revenue more than 25 percent for at least three years.

JPMorgan had no comment, Justin Perras, a spokesman, said in an e-mail.

Debt Lives On

The county’s debt might be reduced in a Chapter 9 bankruptcy, not wiped away, said Matt Fabian, a managing director of Concord, Massachusetts-based Municipal Market Advisors.

“Hopefully, the bankruptcy attorneys will help the council understand that Chapter 9 doesn’t provide the kind of debt relief that they may think it provides; education is a good thing,” Fabian said in an e-mail.

A Jefferson County bankruptcy probably wouldn’t cause a systemic disruption of the $2.9 trillion municipal market, Fabian said.

“Probably half the muni market thinks Jeffco is already in bankruptcy,” Fabian said.

Even if the debt is restructured, the county still must balance its budget without the occupational tax, which generated about $75 million annually, Fabian said.

Nos. 09CA0315 & 09CA1477. Quizno’s Franchising II, LLC v. Zig Zag Restaurant Group, LLC. – June 10, 2010 – Colorado Court of Appeals Opinions

Colorado Court of Appeals — June 10, 2010
Nos. 09CA0315 & 09CA1477. Quizno’s Franchising II, LLC v. Zig Zag Restaurant Group, LLC.

COLORADO COURT OF APPEALS

Court of Appeals Nos. 09CA0315 & 09CA1477

City and County of Denver District Court No. 06CV10765
Honorable Morris B. Hoffman, Judge

Quizno’s Franchising II, LLC,

Plaintiff-Appellant,

v.

Zig Zag Restaurant Group, LLC, a Pennsylvania limited liability company, Ellen Blickman, and Richard Piotrowski,

Defendants-Appellees.

APPEAL DISMISSED AND
ORDER TO SHOW CAUSE DISCHARGED

Division V
Webb, Gabriel, and Plank*, JJ.
PER CURIAM

Announced June 10, 2010

Moye White LLP, William F. Jones, Denver, Colorado, for Plaintiff-Appellant

Patton Boggs LLP, Jeffrey Cohen, Maxine S. Vasil, Denver, Colorado, for Defendants-Appellees

*Sitting by assignment of the Chief Justice under provisions of Colo. Const. art. VI, § 5(3), and § 24-51-1105, C.R.S. 2009.

This case comes before us on our order to show cause why (1) appellant, Quizno’s Franchising II LLC (Quiznos), did not file a motion to dismiss within a reasonable time after the settlement agreement was signed on March 22, 2010, and (2) this court should not take further appropriate action, including potentially imposing sanctions. We do not impose sanctions and thus discharge the order to show cause and dismiss the appeal.

The pertinent facts are not disputed. This case involves consolidated appeals by Quiznos. The matter was fully briefed, the case was at issue as of February 8, 2010, and on March 12, 2010, oral argument was set for May 12, 2010.

On May 5, 2010, Quiznos filed a motion to dismiss and to vacate the oral argument. In that pleading, Quiznos stated, “The parties have reached an agreement and signed a Settlement, Release and Termination Agreement on March 22, 2010.” (Emphasis added.) Because Quiznos offered no explanation for its long delay in filing this motion, we issued our order to show cause.

In its response, Quiznos does not dispute any of the above-described facts. Rather, it apologizes for any inconvenience or waste of judicial resources and explains that although a settlement agreement was signed on March 22, 2010, the settlement resolution was not completed until a number of other actions, including a payment, were complete.

Quiznos also states that upon completion of the settlement on April 7, 2010, counsel for Quiznos contacted this court “to inform [it] of the dismissal and determine what paperwork needed to be filed to formalize that dismissal.” Quiznos states that its counsel “was under the impression that this communication with the court did apprise the court that a formal dismissal document would be forthcoming.” As a matter of practice, however, our clerk’s office would have advised anyone making such a contact that notification regarding a settlement must be made in writing and served on all other parties.

We reaffirm our court’s standard practice that oral notification of the settlement of a pending appeal is insufficient. A party must provide the court with notice of the settlement of a pending appeal immediately and in writing. The notification may take the form of a motion to dismiss the appeal or a motion to stay the appeal and continue oral argument, as appropriate. Counsel should also consider providing such a notification if settlement appears imminent, to avoid any needless expenditure of judicial resources.

As courts in other states have held, the failure to provide appropriate and timely written notification of the settlement of a pending appeal is a ground for the imposition of sanctions against a party or its counsel. See, e.g., Huschke v. Slater, 86 Cal. Rptr. 3d 187, 193-95 (Cal. Ct. App. 2008) (sanctioning counsel for unreasonable delay in notifying appellate court of settlement); Merkle v. Guardianship of Jacoby, 912 So. 2d 595, 601 (Fla. Dist. Ct. App. 2005) (imposing sanctions for counsel’s failure to notify court immediately of settlement of pending case); Riesenecker v. Arkansas Best Freight Systems, 796 P.2d 1147, 1148 (N.M. Ct. App. 1990) (noting that failure to notify court of settlement until after the court decided the appeal was conduct that was prejudicial to the administration of justice and that in the future, the court would routinely advise disciplinary counsel of any instance in which appellate counsel had not forthwith informed the court of a settlement, in whole or part, of a pending case). Nonetheless, in the circumstances presented here, we decline to impose such sanctions.

Accordingly, the order to show cause is discharged, and this appeal is dismissed.

These opinions are not final. They may be modified, changed or withdrawn in accordance with Rules 40 and 49 of the Colorado Appellate Rules. Changes to or modifications of these opinions resulting from any action taken by the Court of Appeals or the Supreme Court are not incorporated here.

No. 06CA1074. McIntire v. Trammell Crow, Inc. – November 1, 2007 – Colorado Court of Appeals Opinions

Colorado Court of Appeals — November 1, 2007
No. 06CA1074. McIntire v. Trammell Crow, Inc.

Arapahoe County District Court No. 04CV546

Honorable J. Mark Hannen, Judge

Brad McIntire,

Plaintiff-Appellant,

v.

Trammell Crow, Inc.,

Defendant-Appellee.

JUDGMENT AFFIRMED

Division III
Opinion by: JUDGE ROY
Taubman and Terry, JJ., concur

Announced: November 1, 2007

Cohen & Associates, P.C., Jeffrey Cohen, Benjamin M. Petre, Denver, Colorado, for Plaintiff-Appellant

Overturf McGath Hull & Doherty, P.C., Mark C. Overturf, Robert I. Lapidow, Denver, Colorado, for Defendant-Appellee

Plaintiff, Brad McIntire (the worker), appeals the trial court’s summary judgment in favor of defendant, Trammell Crow, Inc. (the manager). We affirm.

The worker commenced this proceeding alleging that he was injured when a pulley temporarily installed to lift wallboard broke loose from its mooring, fell, and struck him on the head. At the time of the accident, the worker was an independent contractor for a glass and construction business (the contractor) that had been hired by the manager to repair skylights.

The worker’s complaint alleged causes of action against the owner of the building, the manager, the contractor, and various construction workers, premised, as relevant to the manager, on theories of negligence, premises liability, negligent selection of the contractor, negligence per se for failing to have workers’ compensation insurance, and civil conspiracy. The manager moved for summary judgment, asserting that section 13-21-115, C.R.S. 2007 (the Act), is the worker’s exclusive remedy, and that the manager could not be held liable as it did not know, and had no reason to know, of the defective mooring of the pulley.

It is undisputed that the manager is a “landowner” within the meaning of section 13-21-115(1), C.R.S. 2007, and that the worker was an “invitee” within the meaning of section 13-21-115(5) (a), C.R.S. 2007.

The trial court granted the motion after concluding, among other things, that the manager neither knew, nor had reason to know, that the pulley was inadequately moored and was, therefore, dangerous. The manager then filed a motion for entry of final judgment, which the trial court granted.

On appeal, the worker asserts that the trial court erred in reading the Act too narrowly and that the manager should be held liable under the Act because (1) the nature of the construction work involving tall scaffolding was dangerous; (2) the construction site was unsupervised the day of the accident; and (3) the workers did not wear hard hats. We are not persuaded.

  1. Summary Judgment

Summary judgment is appropriate when the pleadings, affidavits, depositions, or admissions establish that there is no genuine issue of material fact and that the moving party is entitled to judgment as a matter of law. “The moving party has the burden of establishing the lack of a triable factual issue, and all doubts as to the existence of such an issue must be resolved against the moving party.” Cung La v. State Farm Auto. Ins. Co., 830 P.2d 1007, 1009 (Colo. 1992) (quoting Churchey v. Adolph Coors Co., 759 P.2d 1336, 1340 (Colo. 1988)). We review a grant of summary judgment de novo. Vail/Arrowhead, Inc. v. Dist. Court, 954 P.2d 608, 611 (Colo. 1998).

  1. Standard of Review

The interpretation of statutes is a question of law subject to de novo review. Hendricks v. People, 10 P.3d 1231, 1235 (Colo. 2000). When construing statutes, our primary duty is to give effect to the intent of the General Assembly, looking first to the statute’s plain language. In re 2000-2001 Dist. Grand Jury, 97 P.3d 921, 924 (Colo. 2004). If a statute is clear and unambiguous on its face, then we need not look beyond the plain language and must apply the statute as written. Garhart ex rel. Tins man v. Columbia/HealthONE, L.L.C., 95 P.3d 571, 591 (Colo. 2004).

III. The Act

The premises liability statute was adopted for the stated purpose of “protect[ing] landowners from liability in some circumstances when they were not protected at common law and . . . defin[ing] the instances when liability will be imposed in the manner most consistent with the policies set forth in [the same sub-section].” § 13-21-1 15(1.5)(e), C.R.S. 2007. The General Assembly’s adoption of the Act reinstated the common law classifications and established a standard of care applicable to each.

As pertinent here, the liability of a landowner to an invitee under the Act is stated in section 13-21-115(3)(c)(I), C.R.S. 2007, as follows: “Except as otherwise provided in [an inapplicable subsection], an invitee may recover for damages caused by the landowner’s unreasonable failure to exercise reasonable care to protect against dangers of which he actually knew or should have known.” (Emphasis added.)

Section 13-21-115(2), C.R.S. 2007, in pertinent part, states:

In any civil action brought against a landowner by a person who alleges injury occurring while on the real property of another and by reason of the condition of such property, or activities conducted or circumstances existing on such property, the landowner shall be liable only as provided in subsection (3) of this section.

(Emphasis added.)

As explained by our supreme court,

[T]he premises liability statute’s classification of the duty owed . . . invitees is . . . complete and exclusive. . . . [A] landowner owes an invitee the duty to exercise reasonable care in protecting against known dangers or those which the landowner should have known. Since these are the “only” situations under which a[n] . . . invitee may recover, the statute’s definition of landowner duty is complete and exclusive, fully abrogating landowner common law duty principles. As such, the plain language preempts prior common law theories of liability, and establishes the statute as the sole codification of landowner duties in tort.

Vigil v. Franklin, 103 P.3d 322, 328 (Colo. 2004) (emphasis added).

The worker’s argument is premised on our emphasized language in section 13-21-115(2). Specifically, he asserts that the property manager should be liable because (1) the nature of the construction work involving tall scaffolding was dangerous; (2) the construction site was unsupervised the day of the accident; and (3) the construction workers did not wear hard hats.

The worker appears to argue that section 13-21-115(2) expands section 13-21-115(3), which, we initially note, is contrary to the express language of section 13-21-115(2) that “the landowner shall be liable only as provided in subsection (3) of this section.”

(Emphasis added.) The term “only” means “as a single solitary fact or instance or occurrence.” Webster’s Third New International Dictionary 1577 (2002); see also Riemer v. Columbia Med. Plan, Inc., 747 A.2d 677, 687 n.7 (Md. 2000).

Further, the “dangers” under section 13-2 1-1 15(3)(c)(I) for which the landowner is liable, almost by definition, must arise from “the condition of such property, or activities conducted or circumstances existing on such property.” § 13-21-115(2), C. R. S. 2007. It is not knowledge of the condition, activities, or circumstances that gives rise to liability; it is the danger of which the owner actually knew or should have known. Here, that danger was the inadequately moored pulley.

Therefore, because there is no evidence that the manager actually knew or should have known of the improperly moored pulley, which was the undisputed danger, summary judgment was properly entered.

The judgment is affirmed.

JUDGE TAUBMAN and JUDGE TERRY concur.

These opinions are not final. They may be modified, changed or withdrawn in accordance with Rules 40 and 49 of the Colorado Appellate Rules. Changes to or modifications of these opinions resulting from any action taken by the Court of Appeals or the Supreme Court are not incorporated here.