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. BCI 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 the $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, BCI 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. We were able to negotiate with 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.

A prominent celebrity restaurateur contacted us shortly before opening a new restaurant that 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. They key is to quickly isolate these issues at the forefront of the process.

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. BCI 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. This noncompliance would then trigger defaults under the various loan documents that were in place. Through our long-term relationships with the various agencies, BCI was able to quickly remove the "old officer" from the license without triggering any noncompliance issues. Once the records were updated to reflect the removal of the old officer, BCI prepared the requisite applications and fingerprint cards to add the replacement officer onto the 400 licenses operating across the U.S.

A large hotel that sells over $15 million in liquor revenues annually contacted our office on 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. Through our quick response and understanding of the regulations, BCI was able to file documentation on Friday afternoon to reflect the change in trade name. Moreover BCI was successful in coordinating 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.

A court-appointed receiver contacted us regarding a portfolio of hotels located in ten different jurisdictions. The receiver needed to immediately identify any ongoing issues and requested that BCI put together an action plan for moving forward. BCI was able to set forth the criteria under which the receiver could continue to operate (which included the addition of specific language to the Court Order) as well as establish a time line for filing all necessary documentation so that the properties could continue to sell alcoholic beverages once they went into foreclosure. BCI was also able to quickly determine the outstanding tax issues that would need to be resolved prior to any future auction or sheriff’s sale of the assets.