Bluebonnet Consulting regularly handles the most complex projects for extremely large clients all across the United States. We are very familiar with the numerous regulations and agencies involved, which allows us to deliver on our clients needs in even the most unexpected scenarios. Read the brief case studies below to find out more about how Bluebonnet has successfully negotiated even the most challenging situations and produced a victory for our clients.
Threats & Licensing
Large hospitality franchise contacts us because a top officer (named on every license) was terminated from the company
Staffing changes are difficult, but imagine terminating a key employee and then realizing that this person is affiliated with 400 of your liquor licenses across the country. Since almost all of the licensing agencies require background checks and FBI checks on officers of liquor licensees, any change to those individuals triggers filings and in some cases compliance issues.
Bluebonnet received a panicked call from one of our long-time customers who had terminated a senior officer of the company. This individual, in retaliation, was making economic demands of the company because they were still listed as an officer of record on all of the company’s liquor licenses. Discussions had gotten emotional and this former employee was threatening to send letters to all of the licensing agencies informing them that he was no longer affiliated with the company which would ultimately put the licenses in noncompliance.
Licenses that fall into non-compliance can trigger defaults under loan agreements and other contracts. Through our long-term relationships with the various licensing agencies, Bluebonnet was able to quickly update over 400 liquor licenses to bring them back into compliance. Problem solved!
Opening A New Restaurant
A prominent celebrity restaurateur contacted us shortly before opening a new restaurant which was going to be located in a historic building. The restaurateur thought they had allowed enough time to secure a liquor license, but did not realize that their location within an historic building triggered some additional posting requirements. In fact, the restaurateur was completely unaware that the local government required an additional legal notice period of 60 days in connection with this historic building site.
Further, the actual liquor license application could not be filed until this 60-day legal notice period had concluded. Thus, it appeared that the restaurateur would not have a liquor license for their grand opening and they had spent significant dollars in promoting the opening of the new restaurant particularly since it was located in a well-known historic area.
We were able to negotiate with the local jurisdiction to allow the restaurant to post the legal notice while the application was being processed. Ultimately, the restaurant was granted their liquor license in time for the grand opening. In many states across the county, there are many sites that must meet special requirements because they lie within restricted areas that are close to schools, hospitals, churches and areas set aside for historic preservation. The key is to quickly isolate these issues at the forefront of the process.
Closing A Loan
In the current economic climate, lenders are more concerned about compliance of liquor licenses than ever. However, they don’t necessarily understand the process and therefore they generally ask for more assurances than are allowed to them under the law. Bluebonnet was approached by one of our large hedge fund clients to work with their lender who was insisting upon being granted a security pledge of the liquor license that was in operation at the asset in question.
This request by the lender had been made at the last minute – right before closing – and the request was now holding up the closing of a $2.5 billion dollar loan. Since many states do not allow a liquor license to be pledged to a third party without intense scrutiny of that third party, Bluebonnet intervened to educate the lender on the process and the fact that in some jurisdictions, a security pledge of this sort would qualify as “an interest” in the liquor license.
Our team negotiated with the lender’s counsel to help them understand that granting the lender a security interest in the license would trigger significant disclosures about the lender. Naturally, the lender was unwilling to make the required disclosures about their structure and organization and ultimately took a stock pledge of the corporate entity that held the license in lieu of a pledge of the liquor licenses.
Changing Your Name
A large hotel that sells over $15 million in liquor revenues annually contacted our office on a Friday morning because their wholesaler would not deliver any alcohol to the hotel. The hotel was hosting a large charity gala on Saturday evening and was making a significant inventory purchase in anticipation of the 2,000-person event.
The hotel had recently changed franchises and the lawyers involved had been so focused on the UFOC that they had failed to notify the licensing agency of the change to the trade name of the hotel. Under the laws of this particular jurisdiction, the wholesaler could not legally deliver alcohol to an establishment whose trade name was not listed on the actual liquor license.
Thanks to our team’s quick response and intimate understanding of the regulations, Bluebonnet was able to file documentation on Friday afternoon to reflect the change in trade name. Moreover Bluebonnet successfully coordinated a conference call between the agency and the senior management at the wholesaler that resulted in the verbal approval of the trade name change and the hotel was able to take delivery of the much-needed liquor inventory for the charity gala that occurred the following day.