Cathouse. New 'owner' screwed?

[Guest]

You can get, what, 3 large bottles of chang in the store for 100 baht? And really, how much Chang can the average person drink without passing out? Throw in lady drinks and barfines, yeah I can see he made money.

[jack_schist]

So whats the go now. who is running the place? a proxy for BH or the guy who thought he bought the lease?

[..]

shygye said:

It seems to me that TC was highly unethical in selling "his" bar, ie, he had no right to transfer his sublease.

No real idea, but what I have heard from independent sources seem to point to Boss Hogg as being the wanker in the whole thing (big surprise LOL). It seems that there was nothing contractual preventing TC from selling his sublease, but the Boss has decided to enforce the provision that says he can get more key money from the new lease owner. Dunno how true that is, but it comes from someone who could know and has no axe to grind with either party. Now did TC disclose that BH could do that? Who knows? But that seems to fall under due dilligence to me (i.e., if legally enforceable, then the key money clause was in the sublease contract that the new owners should have read).

 

On one hand, the Boss has more money than God AND he is selling off all his LoS assest, so he could have just looked the other way cuz a couple of million baht will make noo difference to him. On the other hand, biz is biz and the capitalist way is to get the most money out of any situation.

 

Jack: I have no idea who is running the joint cuz I never set foot into NEP nowadays.

 

Cheers,

SD

[shygye]

Well that does not make sense since BH has NO contractual relationship with the buyers but ONLY with TC. TC is the one on the hook for any additional key money, ie, sublease transfer fee as he signed the sublease with BH.

[Guest]

Depends how you see it. As is always done in SE Asia, when a new business owner comes in, he must renegotiate the lease and/or key money. regardless of the deal the seller had with the landlord. Not understanding that is part of the due diligence mentioned. Whatever deal for key money etc. that TC had with BH does not necessarily appply to the new owner. That is then between them and BH.

 

May not be the way it is done elsewhere, but it sure is here. I can personally cite several of these arrangements going sour because of this misunderstanding/presumption. If you don't understand how the bar business is conducted here, then you 'will' pay to learn.

 

But what the heck do I know, I'm just a newbie here.

[Old Hippie]

I have seen the way Boss Hog acts, frankly, I am shocked no one has :filled him in/sorted him out" yet.

[Stickman]

Interesting?.what is it about the Boss Hogg way that you do not like. He has always struck me as being straight, and what I would have termed a fairly tough businessman in the West. He certainly isn?t the ignorant guy that many Westerners are in Thailand ? I mean business owners who jump into a business without knowing all of the ins and outs.

 

Obviously I am not privy to all of his dealings but what he has told me about various deals he has done, he seems to be quite upfront about things.

[farangman]

Have to agree with you. Boss Hogg may not be everyone's cup of tea but I have always found him to be a good guy to have a beer with.

 

I know no details of the sale of CatHouse, but to me, *if* BH was due extra money from the sale, he is perfectly entitled to go after it, especially if someone circumvented dealings to make a sale go through.

[Guest]

The speculation about Cat House?s business model (including my own comments) provide an interesting, but irrelevant, diversion from the real issues here. Chang Beer is cheap and Cat House would not be the first business to lure customers in with one thing ? cheap beer - but actually make most of its money on something else. Nothing wrong with any of this.

 

But the real issue is the lease. TC purported to sell a business which relies on a lease without getting the written consent of his lessor, Boss Hogg. Leases that allow assignment and subletting without the permission of the lessor are very rare here. And when the lease is silent on the matter, you cannot assign or sublet without the lessor?s written permission. This is why I used the word ?purported? ? I don?t see how you can sell a bar without also arranging for the lease to be assigned or a sub-lease approved by the lessor, BH.

 

After this it all seems to get a bit fuzzy, depending on who knew and said what to whom. Did buyers purchase the bar knowing about this risk but not caring? That would be very foolish. Indeed, it so foolish that it is unlikely. Did TC not know this himself? Some comments here suggest confused thinking about the issue, and the prospect of a good sales price might have distracted him from clearly thinking through these very basic issues? Why didn?t the buyers check on something this fundamental? Did the buyers just not know? If so, the buyers must have been pretty naïve. Did TC mislead them? Did BH imply that he would consent or verbally promise he would do so, and then changed his position? BH is not popular here, but I think everyone, particularly TC, would know that BH is tough and business savvy; and knowing how tough BH is, you?d think TC would nail down this ?detail? before or when money changed hands for the ?sale? of the bar. Without this detail nailed down, BH is in very strong position.

 

At best, some people were very naive; at worst, there was a fraud. My hunch is that the truth is somewhere in between.

 

I wouldn?t want to have to work out these sorts of issues in a Thai courtroom. Maybe another lesson here ? besides doing your homework ? is put an arbitration clause and a bit a thought into your contracts here. Putting the details on paper forces you think through those details, and it seems like some people just didn't think through these details very clearly.

 

Maybe we should suggest that Chula use this as a case study in its foreign MBA program of what not to do when selling or buying a business in Thailand? ::

[Guest]

Old Hippie said:

I have seen the way Boss Hog acts, frankly, I am shocked no one has :filled him in/sorted him out" yet.

 

Actually, that has happened. Twice if i recall correctly. Not so much because of his tough business demeanor, but rather because of his personal 'charm'.