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You're invited Monday night in Houston!

You're invited in Houston!

" The next month may shape the outlook and direction for CVS for the next 10 years," wrote Needham analyst Kevin Caliendo in a note to clients; further saying that he "believes a new CVS-Aetna could easily grow earnings 10 percent annually down the road, given no hiccups in pharmacy benefit management during integration or lost share to Amazon".

CVS-Aetna deal 'really smart' way to ward off Amazon encroachment, analyst says CVS Health's bid to acquire Aetna is a "really smart" way of staving off competition from Amazon, according to one analyst.

Whose Rogue Is It Anyway, A Landlord’s Or Its Tenant’s?
By Ira Meislik of the Law Firm of Meislik & Meislik

There are some substantive aspects of exclusive use covenants – promises by a landlord to its tenant that only that tenant will be permitted to sell certain goods or services at the shopping center. There are difficulties and challenges faced when writing rules as to what can and can’t be sold and the extent to which certain other tenants could be free, in some or all regards, of those crafted restrictions.

There are various remedies an aggrieved tenant might have against its landlord if the landlord’s covenant (promise) was broken, but another issue is how, when, and with what success a “protected” tenant might directly act against a neighboring tenant alleged to sell those goods or services even though the neighboring tenant knows or should know of the restriction.

A common theme in comments on this subject is that landlords shouldn’t have any liability for “rogue” tenants. In that context, a “rogue” tenant is one whose lease says it can’t sell a particular good or service, but it does so anyway. Attorney Ira Meislik doesn’t always think that a landlord should be responsible. It’s just that in the normal situation, he thinks the better argument is that it should. This is a business issue, and, as such, whether a landlord will or will not be liable for the acts of a “rouge” tenant will depend on the relative bargaining power of the parties for that particular lease.

He thinks a tenant doesn’t bargain for its landlord to add specific text to the leases of other tenants. It bargains for exclusivity. It doesn’t bargain for the right to sue another tenant over whom it has little if any power to control. It bargains for its landlord to deliver a certain selling environment. When a tenant signs a lease, it is expecting exclusive possession of the given leased space in return for paying rent. Basically, a tenant wants actual possession, not merely the right to possession. It wants the leased space to be free of other occupants and free of anyone else with the right to occupy the leased space. It doesn’t want just the right to eject another occupant. It wants its landlord to get all other occupants out of the space. So, tenants need to read their leases carefully to make sure they are to get actual possession, not merely the right to obtain actual possession. Yes, it is possible to contract only for the right, not for actual possession.

Here’s the tie in. It’s the same principle when it comes to “rogue” tenants. A tenant who has bargained for an exclusive use right should get more than just the right to enforce that right on its own. It shouldn’t wind up with only a promise that its landlord will include a clause with certain restricted use provisions in later tenant’s leases. If that’s all it winds up with, all that it has gotten is a promise from its landlord that it will write future leases in a certain way, and nothing more.

A landlord has a lot of power over a defaulting tenant. It holds a key remedy. It can evict a defaulting tenant. To the defaulting tenant, that’s pretty draconian. If a landlord promises its tenant an exclusive use right, there should be some consequence to the landlord if the protected tenant doesn’t get one. Protected tenants don’t just want the right to seek an injunction against a “rogue” tenant or a basis upon which to seek damages against a “rogue” tenant. That’s not the simple meaning of bargaining for an exclusive use right. Yes, it would be one thing if the “deal” struck at the outset was only that the landlord would impose a restriction against future tenants at the shopping center. Certainly, that could be the “deal” even though it’s rarely seen that way in a term sheet. Most of the time there is some form of promise that “the tenant will have the exclusive right to” sell such and such, sometimes continuing with a hint of the “carve-out” language that will show up in a the lease. Perhaps the mantra of “say what you mean, mean what you say” should extend to deal sheets.

Yes, if a landlord agrees to grant exclusivity, it should deliver exclusivity.