Loading...
HomeMy WebLinkAbout064960 - Settlements - Contract - Craft Culinary Concepts LLC50*901•[•�• •I:I17 SETTLEMENT AND RELEASE AGREEMENT This Settlement and Release Agreement ("Agreement") is entered into by and between the City of Fort Worth ("City"), a home -rule municipality organized under the laws of the State of Texas, and Craft Culinary Concepts LLC ("Craft"), a Delaware limited liability company. The City and Craft are collectively referred to as the "Parties." RECITALS WHEREAS, the City and Craft entered into that certain exclusive food and beverage services agreement, identified as City Secretary Contract No. 57971 ("F&B Agreement"), under which Craft provides food and beverage services at the Will Rogers Memorial Center; WHEREAS, a dispute has arisen between the Parties regarding performance and obligations under the F&B Agreement; WHEREAS, the Parties wish to fully and finally resolve their disputes, avoid litigation between one another, and wind down their contractual relationship; and WHEREAS, the Parties therefore agree to the following mutually negotiated terms to settle all claims and effect an early termination of the F&B Agreement. NOW, THEREFORE, in consideration of the mutual covenants and agreements set forth herein, the Parties agree as follows: I. INCORPORATION OF RECITALS The foregoing Recitals are true and correct and are incorporated into this Agreement as material terms. II. TERMINATION AND CONSIDERATION A. Early Termination. The parties mutually agree that the F&B Agreement shall terminate effective April 13, 2026 ("Termination Date"). B. Consideration from the City: The consideration provided by the City under this Section II.B shall constitute the City's full and complete financial obligation to Craft under the F&B Agreement and in connection with its termination. In full satisfaction of all obligations owed to Craft (including, without limitation, management fees, retention bonus, and offset for FY25 operating losses), the City agrees as follows: OFFICIAL RECORD CITY SECRETARY FT. WORTH, TX Settlement Agreement and Release — Craft Culinary Concepts, LLC l of 9 4928-9597-1738 1. Buyout Amount. The City shall pay Craft the amount of Five Hundred Ten Thousand Dollars ($510,000.00) (the "Buyout Amount"), representing the buyout or unamortized amount due under Section 4.2(e) of the F&B Agreement. 2. Release of Repair Funds and FY26 Profits. In lieu of any cash payment for: (i) the management fee contemplated by Section 3.1(b) of the F&B Agreement for the period October 1, 2024 through the Termination Date, (ii) the Twenty Thousand and No/100 Dollars ($20,000.00) retention bonus to be paid to Craft employees, and (iii) any offset or reimbursement for Craft's operating losses incurred in fiscal year 2025 (collectively, the "Satisfaction Items"), the City hereby irrevocably releases, assigns, transfers, and disclaims any and all right, title, interest, claim, or entitlement it may have (if any) in and to the following (the "Released Funds"): a) The balance of the Repair Fund, as defined in Section 3.1 of the F&B Agreement, including all funds on deposit therein as of the Termination Date in an amount not to exceed $205,000.00; and b) The balance of the City's ninety percent (90%) share of any net profits generated from operations under the F&B Agreement for fiscal year 2026 through the Termination Date ("FY26 Profits'), in an amount not to exceed One Hundred Thousand and No/100 Dollars ($100,000.00) from FY26 Profits. c) The total aggregate value of the Released Funds hereunder shall not exceed Three Hundred Five Thousand and No/100 Dollars ($305,000.00). If the balance of the Repair Fund as of the Termination Date exceeds $205,000, then the terms of the F&B Agreement shall control for every cent more than $205,000.00. If the balance of the City's 90% share of FY26 Profits as of the Termination Date exceeds $100,000.00, then the terms of the F&B Agreement and its profit-sharing provisions shall control for every cent in excess of $100,000. For the avoidance of doubt, nothing in this Agreement shall alter the F&B Agreement's automatic vesting of the Repair Fund to the City upon termination except to the extent of the Released Funds hereunder. Notwithstanding any contrary provision in the F&B Agreement (including any automatic vesting of the Repair Fund to the City upon termination or any profit-sharing formula), the Repair Fund shall not vest in, revert to, or become the property of the City to the extent of the Released Funds hereunder. Instead, effective automatically on the Termination Date (or the Effective Date of this Agreement, if later), Craft shall receive full ownership, control, and right to the Released Funds, free and clear of any City claim or interest. The parties stipulate and agree that the release and transfer of the Released Funds hereunder fully and finally satisfies the City's obligations with respect to the Satisfaction Items, Settlement Agrecmcnt Euid Release -- Craft Culinary Concepts, LLC 2 of 9 4928-9597-1738 regardless of the actual dollar amount of funds or profits ultimately received or realized by Craft (subject to the limitations set forth above). d) The parties agree to calculate and allocate the Released Funds as follows: i. Within thirty (30) calendar days after the Termination Date, Craft shall provide the City with a written statement showing: (i) the balance of the Repair Fund as of the Termination Date; and (ii) the value of the City's 90% share of net FY26 Profits through the Termination Date (calculated in accordance with the F&B Agreement). I The Released Funds shall be drawn from the Repair Fund balance up to $205,000,00, and from the City's 90% share of FY26 Profits up to $100,000.00. Any additional funds from the Repair Fund or the FY26 Profits will be apportioned and released to the appropriate party in accordance with the terms of the F&B Agreement. iii. The City shall have no obligation to provide additional funds if the combined Repair Fund and available FY26 Profits are less than $305,000.00. 3. Timing and Condition Precedent. a) The City shall remit the Buyout Amount to Craft by wire transfer or other immediately available funds within thirty (30) days after the Effective Date of this Agreement. b) The release, assignment, transfer, and disclaimer of the Repair Fund and FY26 Profits under Section II.B.2 shall become effective automatically on the Termination Date (or the Effective Date of this Agreement, if later). e) Notwithstanding the foregoing, no payment of the Buyout Amount nor effectiveness of the release/disclaimer under Section II.B.2 shall be due or effective Lentil Craft has fully complied with all obligations under this Agreement, including (without limitation) all cooperation obligations and any other surviving duties herein. C. Inventory Sale to Successor Operator. Craft, as the current exclusive concessions based food and beverage operator and holder of the applicable Texas Alcoholic Beverage Commission ("TABC") license, maintains an inventory of alcohol for on -premises sale, as well as other food, diy goods, and consumable items (including, without limitation, non-alcoholic beverages, ingredients, paper goods, disposables such as cups, napkins, utensils, condiments, and similar settlement Agreement and Rclease — Craft Culinary Concepts, LLC 3 of 9 4928-9597-1738 items) used in connection with operations at the Will Rogers Memorial Center (collectively, the "Inventory"). Craft may elect to sell all or any portion of the Inventory on -premises (or otherwise as agreed) to any successor food and beverage provider (the "Successor Operator") that is duly licensed by the TABC for on -site alcohol sales (if alcohol is included in the sale) and otherwise authorized to purchase and use such items. Any such sale shall comply with applicable laws, including without limitation the Texas Alcoholic Beverage Code and related TABC rules for bulk sales of alcoholic beverages following license surrender, expiration, or cancellation. Craft shall handle all required TABC filings, notifications, and approvals for the alcohol Inventory at its sole expense and shall provide the City with copies of any approved transfer documents within five (5) business days after completion. Craft shall be entitled to retain all proceeds from any such sale of the Inventory. The City hereby waives, disclaims, and releases any and all rights, title, or interest it may have (if any) in the Inventory or the proceeds of any such sale. The City makes no representations or warranties regarding the quantity, quality, condition, merchantability, fitness for purpose, or legality of the Inventory, and Craft accepts full responsibility for ensuring compliance with all health, safety, sanitation, and regulatory requirements in connection with the sale or transfer of the Inventory. The parties shall reasonably cooperate to facilitate a smooth transition of the Inventory to the Successor Operator, if elected, including providing access for inspection and inventory counting as reasonably requested. D. Full and Final Satisfaction. Craft acknowledges and agrees that, upon the City's satisfaction of its obligations under this Section II (subject to the condition precedent in Section II.B.3(c)), Craft shall have no further claim or right to any payment, reimbursement, profit share, Repair Fund moneys, FY26 Profits, or other financial consideration of any kind from the City under the F&B Agreement or otherwise. M. WAIVER OF INTEREST IN 100X LITIGATION A. The City hereby waives, disclaims, and releases any and all right, title, interest, claim, or entitlement it may have (if any) in or to the litigation styled Craft Culinary Concepts, LLC v.1OOX Equine, LLC, Cause No. 236-369256-25, pending in the 236th Judicial District Court of Tarrant County, Texas, including any recoveries, settlements, judgments, or other proceeds therefrom. Craft shall retain sole ownership and control of such litigation. B. Attome s' Fees and Costs Incurred to Date. Craft shall be solely responsible for, and shall promptly pay when due, all attorneys' fees, costs, and expenses incurred in connection with the 100X litigation identified above on or before the Effective Date, including without limitation all hourly fees owed to its current collections counsel. The City shall have no obligation to reimburse Craft for any such pre -Effective Date fees, costs, or expenses.. IV. TABC LICENSE SURRENDER A. Surrender. Effective as of the Termination Date (April 13, 2026), Craft shall surrender to the TABC the TABC license(s) and any associated permits held by Craft that authorize alcohol Settlement Agreement and Release —Craft Culinary Concepts, LLC 4 of 4928-9597-1738 sales or service at the Will Rogers Memorial Center in connection with the F&B Agreement (collectively, the "TABC License"). B. Required Actions. Crab shall timely take all actions required by the TABC or applicable law to effectuate the surrender, including without limitation executing and filing all required forms, applications, notices, and paying any outstanding fees or taxes, and returning any TABC-issued materials. Craft shall provide the City with written proof of the completed surrender (including a copy of the TABC acknowledgment or cancellation notice) within three (3) business days after the Termination Date. C. Coordination and Indemnification. The City and Craft shall reasonably cooperate and coordinate to facilitate a smooth transition of food and beverage operations and licensing at the Will Rogers Memorial Center following the Termination Date. Notwithstanding the foregoing, Craft shall remain solely responsible for all TABC-regulated activities conducted under the TABC License prior to the Termination Date. Craft shall indemnify, defend, and hold the City, its officers, employees, and agents harmless from and against any and all claims, demands, liabilities, penalties, fines, taxes, costs, and expenses (including reasonable attorneys' fees and costs of defense) arising out of or related to: (i) Craft's operation under the TABC License, (ii) any violation of TABC rules or regulations occurring on or before the Termination Date, or (iii) the surrender process itself. This indemnification obligation survives the Termination Date and the expiration or termination of this Agreement. D. No City Liability. The City makes no representation or warranty regarding the TABC's approval of the surrender or the issuance of any new license to a successor operator. Craft acknowledges that the City has no obligation to assume, guarantee, or otherwise become involved with the TABC License or any successor licensing. V. MUTUAL RELEASE A. Mutual General Release. Effective upon the later of. (i) the Effective Date of this Agreement; and (ii) the City's full satisfaction of all payment and release obligations under Section H.B (including remittance of the Buyout Amount and effectiveness of the full release and disclaimer of the Repair Fund and FY26 Profits as described therein), each Party, for itself and on behalf of its respective past, present, and future officers, directors, employees, agents, representatives, successors, assigns, affiliates, heirs, executors, and administrators (collectively, the "Releasing Parties"), hereby fully, finally, irrevocably, and unconditionally RELEASES, ACQUITS, AND FOREVER DISCHARGES the other Party and its respective past, present, and future officers, directors, employees, agents, representatives, successors, assigns, affiliates, attorneys, insurers, and all persons or entities acting by, through, under, or in concert with any of them (collectively, the "Released Parties"), from any and all claims, demands, actions, causes of action, liabilities, obligations, damages, losses, costs, expenses (including attorneys' fees and court costs), controversies, suits, rights, or remedies of every kind and nature whatsoever, whether known or unknown, suspected or unsuspected, accrued or unaccrued, contingent or non - contingent, liquidated or unliquidated, at law, in equity, or under statute, contract, tort, or settlement Agreement and Release — Craft Culinary Concepts, LLC 5 of 9 4928-9597-1738 otherwise, that any Releasing Party ever had, now has, or may hereafter have against any Released Party arising out of, relating to, or in any way connected with: 1. The F&B Agreement (including its negotiation, performance, breach, termination, or any rights or obligations thereunder); 2. The operations, management, or provision of food and beverage services at the Will Rogers Memorial Center prior to the Termination Date; 3. Any dealings, transactions, communications, or events between the Parties prior to the Effective Date; or 4. Any other matter that was or could have been asserted in connection with the foregoing. This mutual release expressly includes, without limitation, claims for breach of contract, breach of warranty, negligence, gross negligence, fraud, misrepresentation, tortious interference, unfair competition, statutory violations, consequential damages, lost profits, reliance damages, punitive or exemplary damages, and any claims for equitable relief (such as specific performance or injunction). B. Exclusions from Release. Notwithstanding anything in this Section V to the contrary, this mutual release does not apply to or release: 1. Any obligations, covenants, or rights created by or expressly surviving under this Agreement (including, without limitation, the obligations under Sections II, III, and IV, and any indemnification or cooperation obligations herein); 2. Any claims arising from a willful breach of this Agreement after the Effective Date. C. No Admission of Liability. This Agreement is the result of a compromise and settlement of disputed claims. Nothing in this Agreement shall be construed as an admission of liability, fault, wrongdoing, or responsibility by any Party, all of which are expressly denied. D. Covenant Not to Sue. Each Party covenants and agrees not to sue, commence, prosecute, or participate (except as may be required by law or court order) in any action, proceeding, or claim against any Released Party based on any matter released herein except as otherwise provided herein. VI. REPRESENTATIONS A. The Parties warrant that no promise or inducement has been offered except as set forth herein; that this Agreement is executed without reliance upon any statement or representation of Settlement Agreement and Release — CraR Culinary Concepts, UC G of 9 4928-9597-1738 any person or Party's release, or its representatives, concerning the nature and extent of the losses, injuries, damages, or legal liability therefore; and that the acceptance of the consideration set forth herein is in full accord and satisfaction of all claims set forth herein. B. It is understood that this is a compromise of a claim. The Parties desire to compromise and settle those matters and things set forth herein to avoid the hazard, inconvenience, uncertainty, and expense of litigation. C. The Parties represent and warrant that they are the sole owners of the claims, causes of actions, and rights -in -action being released herein, and they have not transferred, assigned, or otherwise encumbered said claims or any part thereto. D. The Parties hereto shall not assign or transfer their interests and obligations of the settlement set forth in this Agreement other than as expressly provided herein without the prior written consent of the other Party, and any attempted assignment or transfer of all or any part hereof without such prior written consent shall be void. E. The Parties shall reasonably cooperate with each other to ensure a smooth transition of all food and beverage operations, including transferring records, inventories, vendor lists, and operational documents as requested by each other. F. The Parties represent that they have consulted, or had the opportunity to consult, an attorney to seek legal counsel regarding the contents and effects of this Agreement. The Parties further represent that they have been informed of the content and effect of this instrument and that the instrument is executed as their act and deed and of their own free will. VII. MISCELLANEOUS A. This instrument contains the entire agreement between the Parties as to the matters contained herein and the terms of this instrument are contractual and not merely recitals. There are no other agreements, either written or oral, and this Agreement supersedes all earlier representations, negotiations, or agreements about this matter. The Parties acknowledge that the covenants, promises, and representations made herein are binding on, and inure to, the benefit of each of the Parties. B. If any provision of this Agreement is held void, voidable, or unenforceable, the remaining portions shall remain in full force and effect. C. If any action, whether real or asserted, at law or in equity, arises based on any provision of this Agreement, venue for such action shall lie in state courts located in Tarrant County, Texas or the United States District Court for the Northern District of Texas — Fort Worth Division. This Agreement, including any exhibits, shall be construed in accordance with the laws of the State of Texas. settlement Agreement and Release — Craft Culinary Concepts, LLC 7 of 9 4928-9597-1738 D. The Parties represent and warrant that they are over the age of eighteen (18) years, competent to execute this Agreement, have carefully read the foregoing Agreement, and know the contents thereof and have signed the same of their own free will and with the advice of counsel, if applicable. E. This Agreement may be executed in several counterparts, each of which will be deemed an original, but all of which together will constitute one and the same instrument. A signature received via facsimile or electronically via email shall be as legally binding for all purposes as an original signature. F. Non -Disparagement. The Parties agree that they will not directly or indirectly, privately or publicly disparage, deprecate, defame, report, criticize or encourage or induce others to privately or publicly disparage, defame deprecate, criticize, or report any other Party to this Agreement or their principals, employees, or affiliates. G. It is understood that by execution of this Agreement, the City does not waive or surrender any of its governmental powers or immunities. - G. The Effective Date of this Agreement is the date of signature by the City as set forth below in the signature block ("Effective Date"), [Signature Block Follows] Settlement Agreement and Release — Craft Culinary Concepts, LLC 8 of 9 4928-9597-1738 [Executed effective as of the date signed by the Assistant City Manager below.] / [ACCEPTED AND AGREED:] City of Fort Worth: AUVW&— By: Dianna Giordano (Mar 31, 2026 16:57:23 CDT) Name: Dianna Giordano Title: Assistant City Manager Date: Mar 31, 2026 Craft Culinary Concepts, LLC: 7 By: 2—Z& Name: Timothy Bidwill Title: Vice President Date: ,S 3( Za CITY OF FORT WORTH INTERNAL ROUTING PROCESS: Approval Recommended: By: Michael Crum (Mar 31, 2026 17:13:11 CDT) Name: Michael Crum Title: Deputy Director, Public Events Department Contract Compliance Manager: By signing I acknowledge that I am the person responsible for the monitoring and administration of this contract, including ensuring all performance and reporting requirements. By: Approved as to Form and Legality: Name: Title: By: Name: Title: Taylor C. Paris Assistant City Attorney Contract Authorization: M&C: 26-0235 Allison McNamara Asst, Pub. Facilities/Events Director, Public Events Department 4a44�4n� City Secretary: p F F°Rr�dd ° od ptio ��10 pvo o=d °a*� tEXA5a4p �naaaob By: Name: Jannette S. Goodall Title: City Secretary OFFICIAL RECORD CITY SECRETARY FT. WORTH, TX Settlement Agreement and Release — Craft Culinary Concepts, LL,C 9 of 9 4928-9597-1738 City of Fort Worth, Texas Mayor and Council Communication DATE: 03/31/26 M&C FILE NUMBER: M&C 26-0235 LOG NAME: 25CRAFTCU LI NARYSETTLE-TERM I NATEAG REEM ENT SUBJECT (CD 7) Authorize Settlement, Release, and Payment in the Total Amount of $510,000.00 and Offset Payments in an Amount Not to Exceed $305,000.00, for Full and Final Settlement of All Claims Related to the Termination of the Food and Beverage Services Agreement with Craft Culinary Concepts, LLC, and Authorize the Appropriate City Personnel to Execute all Releases, Agreements, and Associated Documentation Necessary to Complete the Settlement RECOMMENDATION: It is recommended that the City Council: 1. Authorize settlement, release, and final payment in the total amount of $510,000.00, and offset payments in the total amount $305,000.00 to Craft Culinary Concepts, LLC for full and final settlement of all claims and disputed amounts related to the termination of the food and beverage services agreement between the City of Fort Worth and Craft Culinary Concepts, LLC (City Secretary Contract No. 57971); and 2. Authorize the appropriate City personnel to execute all releases, agreements, and associated documentation necessary to complete the settlement. DISCUSSION: The purpose of this Mayor and Council Communication (M&C) is to authorize a settlement, release, and final payment to Craft Culinary Concepts, LLC (Craft) in the total amount of $510,000.00 and to authorize an offset of $305,000.00 to reconcile disputed amounts between the City of Fort Worth (City) and Craft. On January 11, 2022 (M&C 22-0031), City Council approved an agreement with Craft to exclusively provide food and beverage concession services at the Will Rogers Memorial Center (WRMC) (the "F&B Agreement"). Due to operational and financial issues, Craft experienced significant operational losses in FY25 and disputes regarding amounts owed under the F&B Agreement arose between the parties. Due to this dispute, and to the City's future management plans for the WRMC, the City and Craft have mutually agreed to an early termination of the F&B Agreement pursuant to an authorized Settlement and Release Agreement. The F&B Agreement required Craft to invest $750,000.00 in value to the WRMC complex in Furniture, Fixtures and Equipment (FF&E). The FF&E investment value was amoritized over the initial 10-year term of the F&B Agreement. The F&B Agreement requires the City to pay Craft for the unamortized portion of its FF&E investment in the WRMC complex if the F&B Agreement is terminated early. As negotiated between the parties, the FF&E payment owed to Craft has been calculated to be $510,000.00. This payment will be considered a capital expenditure, paid from the WRMC Capital budget. All equipment will remain at the WRMC and the sole property of the City of Fort Worth. As additional consideration for Craft's agreement to terminate the F&B Agreement early, it is recommended that the City release its claim or interest to certain amounts owed by Craft to the City for maintenance reserves and year-to-date profit sharing to offset disputed amounts claimed by Craft for FY25 operating losses, FY25 and FY26 management fees, and employee retention incentives. Specifically, the F&B Agreement establishes the following: a repair fund reserve based on a percentage of revenues; Craft's a management fee as a percentage of revenues; and a 90/10 profit share split in favor of the City. In FY25, Craft experienced significant operating losses and, as a result, did not generate profits or sufficient revenue to pay the management fee, as contemplated by the F&B Agreement. To facilitate the early termination of the F&B Agreement, and to resolve all disputes between the parties concerning liability for the FY25 financial losses, the City will disclaim any right, title, or interest to the balance of the repair fund reserves and FY26 profits in an amount not to exceed $305,000.00, which represents the value of this portion of the settlement and requires no additional funding. The offset amount is intended to compensate Craft for: its FY25 management fee for services rendered in FY25; its FY26 management fee for services rendered in FY26 through the date of termination; a Craft employee retention incentive to ensure food and beverage services will be effectively provided through the date of termination; and to offset FY25 operational losses. The City will also disclaim and release its interests, if any at all, in ongoing litigation filed by Craft against a Vendor with an outstanding receivable, and any recoveries therefrom, allowing Craft to retain full control and benefit of that case. The contract is located in COUNCIL DISTRICT 7. A Form 1295 is not required because: This M&C does not request approval of a contract with a business entity. FISCAL INFORMATION / CERTIFICATION: The Director of Finance certifies that funds are available in the current capital budget, as previously appropriated, in the Public Events Capital Fund for the WRMC Kitchen FF&E project to support the approval of the above recommendations and authorization of settlement payment. Prior to any expenditure being incurred, the Public Events Department has the responsibility to validate the availability of funds. Submitted for City Manager's Office by. Dianna Giordano 7783 Originating Business Unit Head: Michael Crum 2501 Additional Information Contact: Keith A. Chisolm 2525 Expedited FORT WORTH. City Secretary's Office Contract Routing & Transmittal Slip Contractor's Name: Craft Culinary Concepts, LLC Subject of the Agreement: Settlement and Release Agreement M&C Approved by the Council? * Yes 0 No ❑ If so, the M&C must be attached to the contract. Is this an Amendment to an Existing contract? Yes ❑ No 0 If so, provide the original contract number and the amendment number. Is the Contract "Permanent"? *Yes ❑ No 0 If unsure, see backpage for permanent contract listing. Is this entire contract Confidential? *Yes 0 No ❑ If only specific information is Confidential, please list what information is Confidential and the page it is located. Effective Date: If different from the approval date. Expiration Date: If applicable. Is a 1295 Form required? * Yes ❑ No 0 *If so, please ensure it is attached to the approving M&C or attached to the contract. Project Number: If applicable. *Did you include a Text field on the contract to add the City Secretary Contract (CSC) number? Yes 0 No ❑ Contracts need to be routed for CSO processing in the followingorder: rder: 1. Katherine Cenicola (Approver) 2. Jannette S. Goodall (Signer) 3. Allison Tidwell (Form Filler) *Indicates the information is required and if the information is not provided, the contract will be returned to the department.