Raizner Slania LLP has filed a commercial lease lawsuit on behalf of a Dallas County, Texas landlord against Local Favorite Restaurants, F/K/A Firebrand Restaurant Group, Taqueria La Ventana, and Snuffer’s Restaurants (the “defendants”).
October 2018 Lease Breach
The allegations in the petition are as follows:
In October 2018, La Ventana and Snuffer’s failed to make timely rent payments and vacated the premises. These acts constituted a default under the terms of the leases. In lieu of filing suit against the defendants, the landlord negotiated and ultimately entered into forbearance agreements with them.
Under both forbearance agreements, both Snuffer’s and La Ventana acknowledged they were in default under their leases. The landlord agreed to accept payments of 85% of the base monthly rent, in addition to the tenant’s continued payment of triple net expenses under each lease.
The landlord also agreed to forgo filing suit against the tenants; but, he still retained legal counsel and did not waive his rights with respect to the past or future defaults under the leases.
While the tenants made rent payments pursuant to the forbearance agreements beginning in November 2018, they did not make the payments in February 2020 and have not made any payments since.
Failure to Make Lease Payments Despite Millions in Approved PPP Loans Leads to Lawsuit
While the defendants’ failure to pay rent continued into 2020 during the coronavirus pandemic, the 2018 failures mentioned above predated it.
Local Favorite Restaurants acted as a guarantor of payment and performance under both leases. Publicly available records indicate that in April 2020, Local Favorite Restaurants was approved for a Paycheck Protection Program (PPP) loan from Citizen’s National Bank of Texas of $5 – 10 million.
Local Favorite Restaurants deliberately failed to pay the rents owed despite receiving a federally backed cash infusion of at least $5 million.
Although the defendants’ failure to pay rent long predated the pandemic, the pandemic has significantly hindered the landlord’s efforts to re-let the premises and mitigate the damages caused by the defendants.
Despite the landlord’s diligent efforts to obtain replacement tenants, no acceptable tenants have emerged. The landlord continues to market the property in an effort to mitigate the damages caused by the defendants.
The Defendants Breached Their Commercial Lease Contract
In addition to the actions mentioned herein, the plaintiff specifically alleges:
Taqueria La Ventana has breached its contract by, without limitation, its failure to pay rents due and owing
Snuffer’s has breached its contract by, without limitation, its failure to pay rents due and owing
Defendants breached their obligations under the Guaranties by failing to make the “prompt and full payment and performance
Defendants breached forbearance agreements by, without limitation, their failure to pay rents due and owing
Defendants breached their guaranty obligations under the forbearance agreements by failing to make the “prompt and full payment and performance, when due, of all obligations and covenants
Texas Commercial Lease Dispute Attorneys
If you are a commercial landlord and your tenants have wrongfully failed to make rent payments, the Texas commercial lease dispute attorneys at Raizner Law can help. Contact us today for a free consultation to discuss your case.