Wednesday, May 12, 2010

Kro's Nest roundup

Piecing together the story from the top...

Beijing Boyce, 5/8 (since updated twice):

Partner problems in the Beijing food and beverage scene are no rarity and the newest case involves The Kro’s Nest where it looks like the pie has hit the fan. The person most associated with this pizza chain, Kro, says that he is being pushed out of the business but that he does not plan on taking it sitting down. Instead, he’ll be standing and flipping pizzas at the Workers Stadium North branch today and tonight and asks diners to pay him directly. That’s all the info I have on this situation at the moment but hope to have more soon.

Global Times, 5/10:

A Kro's Nest manager said staff were told Bauer is no longer part of the company, and that the police were called because he was collecting money from customers. "Nobody wanted to see this happen," she added. She said it was unclear who owned the restaurant chain, calling it a "business secret." Another manager said the owner "saw no need" to talk to the media. Attempts to reach Yuan on his mobile phone failed.

Damjan DeNoble, china/divide, 5/11, in a long post that you should read if you want the final word on the situation as it currently stands:

Indeed, Kro, for longer than a short while, was above a lot of things. Above the ordi­nary, above expec­ta­tion, and above the law, or below it if you hap­pen to under­stand that legal pro­tec­tions in China extend up the social hier­ar­chy, not down. He graced the cover of mul­ti­ple inter­na­tional mag­a­zines, starred in CCTV cook­ing shows, and appeared in a FHM celebrity photo shoot, all before his twenty-fourth birth­day. He was pro­claimed a restau­rant prodigy by Beijing’s Eng­lish lan­guage press, and treated like a celebrity by Chi­nese gos­sip mag­a­zines. Hated and loved, respected more often than reviled.

Whether The Truth be des­tiny, free will, or chaos, I believed he could defy the holy sub­lime just like he had defied the expec­ta­tions of young South­ern gen­try by refus­ing to be any­thing but blue col­lar while a stu­dent at Atlanta’s West­min­ster acad­emy; just like he had defied his pious, lawyer father, first by going to col­lege in Hawaii, instead of Ivy, and then get­ting a full body, seven dragon tattoo.

Dan Harris, China Law Blog, 5/11:

I don't know Kro and I don't have a clue what went on with him and his Chinese "partner," beyond what I have read in this article. But I (like just about every other lawyer who represents businesses) have a ton of experience with partnership disputes (broadly defined) and I am guessing that if I had gathered up the facts and written the article, it would have been very different. My article would have focused on one thing and one thing only --and it would have admittedly been way less interesting than Damjan's article for having done so.

My article (like this post) would have focused on how what appears to have happened here has happened so many other times that lawyers do not even like talking about it. What happened here was a bunch of oral agreements by two people who never got around to legally formalizing their relationship. And then things changed (as they always do) and the partner with greater power took the business from the "partner" with less power. In this case, the Chinese national is ending up with the business because the business is on his "turf."

Again, this sort of thing happens ALL THE TIME ALL OVER THE WORLD. Ask any lawyer who does business law about this sort of thing and then watch them roll their eyes. If they have been practicing a few years, they will almost certainly have their own emotional story to tell. If they have been practicing longer, they will probably just walk away. Too many stories to tell, none all that different. None all that surprising. And too commonplace even to get all emotional about.

The Beijinger's interview with Kro, 5/12:

When we asked Kro whether he could confirm that his partnership with Yuan was based on oral agreements, he replied, “I have been pushing for a legal agreement for two years.” Yuan, he claims, has delayed formalizing their relationship.

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