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Dempsey group's winning Tully's bid may face challenge
This is an archived article that was published on sltrib.com in 2013, and information in the article may be outdated. It is provided only for personal research purposes and may not be reprinted.

Seattle • The battle for Tully's Coffee may not be over.

Although actor Patrick Dempsey greeted star-struck fans and baristas at Tully's stores Friday morning, just hours after his investment group won a bankruptcy-driven bid for the Seattle-based chain, Starbucks officials said the competition for Tully's isn't over.

Starbucks said it and another bidder offered $10.56 million for the financially struggling chain, more than Dempsey's group's $9.15 million. It declined to say who the other bidder was, but a source who asked not be identified said it was AgriNurture, a Tully's franchisee in the Philippines.

Dempsey's group, which includes an undisclosed number of silent partners, won the auction for all 47 Tully's locations after 13 hours of negotiations among seven bidders on Thursday. The final decision was made by a group of Tully's executives, creditors and lawyers.

The deal, which is expected to close in late January, will not affect Tully's wholesale business, which was sold to Green Mountain Coffee Roasters in 2009.

A bankruptcy court judge is set to review Thursday's decision Jan. 11. Typically, any party that wants to oppose such a decision must file an objection before the court date.

It is unclear whether Starbucks will formally oppose Dempsey's victory. "We're evaluating our options," said Starbucks spokesman Zack Hutson.

Starbucks said it made an offer for 25 Tully's locations, including 12 at Boeing sites.

"They wanted to disband the company, and they lost, and they're upset by that," said Dempsey, who added he does not think Starbucks will succeed in changing the decision.

The actor, who plays a character best known as "McDreamy" on TV's "Grey's Anatomy," said Thursday's bidding involved long, endurance-test negotiations.

"Usually, it's pretend, but this was reality," he said. "There was no one saying, 'Cut!,' and no one saying, 'Move this along.' "

Although Dempsey said he has ideas about what Tully's needs to become a profitable company — it has turned a profit in just two of its 20 fiscal years — Dempsey said he will not be the CEO.

Among other things, he wants to "spruce up" Tully's stores, energize its 500 employees, including possibly giving them raises. and update the company's bookkeeping system.

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