On Tirzo's Bistro: The End Game, Part 2
According to some naysayers, there is an unfounded rumor going around that Tirzo’s Bistro is closing. That’s not happening, at least not in the board’s view. The reality is that negotiations between the board and TNF Holdings doing business as Tirzo’s Bistro will be presumably continuing, despite the board's decision yesterday to begin eviction proceedings. For more information about that board decision, Click here. The board has made what they believe are reasonable demands on the lease holder in order for them to proceed under an amended, more favorable lease agreement, as discussed here and in David Berman's excellent summary of the 25 March board meeting.
On the other hand, TNF has failed to respond favorably to those demands. While the impression given by this apparent impasse is one of alarm to some, the current wisdom is that this impasse is merely a negotiating tactic by the leasee. Rather than complying with the board’s reasonable demands to achieve a favorable lease agreement, including proof of payment of past due sales taxes, TNF would appear to be holding out for an offer on even better leasing terms and possibly meeting less burdensome demands. Why give the board what they want if by holding out you can achieve an even better deal and greater concessions from the landlord. In holding out and not complying with the board’s reasonable demands, TNF was in effect calling the board’s implied bluff to take further action. It is clear that TNF lost that round with the board's decision to start eviction proceedings.
TNF wrongly believed that by holding out, the board would merely fold and succumb to the pressure to negotiate on terms more favorable to TNF. That did not happen. Rather than throwing in the towel at this juncture, the board made what they termed a logical business decision to terminate the lease and evict the leasee due to the failure of TNF to make a past due utility payment and the March and now the April rent. That action to evict no doubt should get their attention. That does not mean that Tirzo’s will be gone. On the contrary, such a step must be viewed as part of the negotiating process. Productive lease negotiations are not for the faint of heart, as members of the board have come to learn. Frequently lease negotiations are played out not unlike a game of chess or poker, one carefully planned move at a time. That is no different here.
The board would like to be able to proceed with some assurance that TNF is a viable restaurant enterprise going forward, not a floundering venture perpetually in need of life support. I believe it’s fair to say that both parties are looking for a mutually agreeable outcome that makes it possible for Tirzo’s Bistro to be successful here. The board has announced their requirements for achieving that successful outcome. We have yet to hear from Tirzo’s Bistro.
Ron Johnson 9 April 2010
