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Michael Avenatti’s coffee chain, Tully’s, is dead

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Michael Avenatti
Michael Avenatti.
AP
Photo/Richard Drew


  • Global Baristas,
    the parent company of the Tully’s coffee chain that was founded
    by Michael Avenatti,
    agreed to never again use the Tully’s
    name.  
  • After months of legal back-and-forth, Keurig Green Mountain
    and Global Baristas have entered a permanent injunction that
    prevents Global Baristas from using any Tully’s trademarks or
    related names. 
  • With all Tully’s locations closing earlier this year, this
    represents the
    final death of the coffee chain,
    which was acquired by
    Avanetti and actor Patrick Dempsey in 2013 and closed all
    locations earlier this year.
  • “I had practically nothing to do with the case and sold the
    company for nearly $28 million a long time ago,” Avenatti said in
    an email to Business Insider on Wednesday. “The company agreed to
    not to use the marks because they didn’t care to use the marks
    again.”

Tully’s coffee chain — once acquired by attorney Michael Avenatti
and “Grey’s Anatomy” star Patrick Dempsey — is officially
dead. 

Five years after Global Baristas
purchased roughly 40 Tully’s locations,
the company has
agreed to never operate a coffee chain, or any other food or
beverage business, under the name again. 


After months of legal back-and-forth,
Keurig Green Mountain
and Global Baristas
entered a permanent injunction
in late September that
prevents Global Baristas from using any Tully’s trademarks or
related names. The injunction follows a
January complaint
in which Keurig Green Mountain demanded
that Global Baristas stop using the brand, alleging
that the company failed to pay $500,000 in licensing fees for
2016 and 2017.

Keurig Green Mountain, which owns the Tully’s brand and wholesale
business, will continue to sell Tully’s branded coffee.

The injunction represents the practical death of a coffee chain
that created controversy for Avenatti in recent months, as the
attorney’s star has risen in the political arena.

The attorney, who has become well-known as Stormy Daniels’
attorney and may be considering his own political career, is
listed as Global Baristas’ sole “governing person” in Washington
state business filings. Avenatti told Business Insider that
he sold his stake in Global Baristas, which he founded, at a
nonspecific previous date. 

“I had practically nothing to do with the case and sold the
company for nearly $28 million a long time ago,” Avenatti said in
an email to Business Insider on Wednesday. “The company agreed to
not to use the marks because they didn’t care to use the marks
again.”

Read more: Former
employees reveal what it was like to work at the mysterious
coffee chain once owned by Stormy Daniels’ lawyer — including
running out of coffee and questions about getting paid

The rise of Tully’s

Tully’s was
founded in Washington in 1992
by Tom O’Keefe, but it
struggled to compete with the rise of Seattle-based Starbucks.
Keurig parent company Green Mountain Coffee Roaster purchased the
chain’s wholesale business in 2009 for $40 million, turning
Green Mountain into the chain’s supplier. 

In 2012, Tully’s filed for Chapter 11 bankruptcy with more
than $3 million in debt.

In January 2013, Dempsey swooped in to save Tully’s as the public
face of Global Baristas LLC when the company beat out Starbucks
and five other bidders to acquire Tully’s more than 40 locations
in Washington state for $9.15 million. Behind the scenes,
Avenatti was the original sole owner and manager of Global
Baristas before Dempsey joined as a partner,
according to a complaint filed by Dempsey.

Dempsey (who left Global Baristas in August 2013) and Avenatti
said at the time that the company planned to revamp and expand
Tully’s. Keurig reached an agreement with Global Baristas in 2014
in which the coffee chain pays $250,000 a year for the use of the
brand. 

“It was really exciting,” one former employee who worked at the
chain in 2013
told Business Insider in May.
“And then we started to realize
that nothing was happening.”

The fall of Tully’s


tully's coffee
Tully’s.

Ted
Warren/AP



Global Baristas struggled to pay suppliers and landlords, with
more than 45 lawsuits filed against the company for issues such
as unpaid rent and late payments. In March, all remaining
locations suddenly shut down. 

“Dozens of people showed up for work on that March morning to
find they were without a job,”
an employee who worked for Tully’s for eight years told Business
Insider.

“Many are college students that needed to work to help lighten
the financial burden on their parents, to reduce as much as
possible any future student loans, and to cover their day to day
cash needs. Many are single moms that seriously depended on their
income to support their families,” the employee continued. 

At the time, Suzy Quinn — Tully’s head of communications who is
now working as Stormy Daniels’ head of media relations
—  told
the Associated Press
 that the company was
“rebranding,” an effort that could take months. Since then,
a number of shops that formerly hosted Tully’s have been reopened
under new names and ownership, completely separate from
Global Baristas.

Avenatti has faced more
general

scrutiny
regarding his finances since Business Insider
initially reported on Tully’s in April. 

On Monday,
Avenatti was ordered to pay $4.85 million
for failing to pay
a debt to a former colleague, Jason Frank. Avenatti told
reporters that Frank instead owed him millions for “fraud” he
committed. 

Also on Monday, Avenatti’s law firm, Eagan Avenatti, was evicted
from its Orange County offices for allegedly failing to pay rent.
Avenatti
told the Daily Beast
he had divested his interest in the law
firm and that it was not his responsibility.

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