Kraft Foods Inc. said an appeals court agreed to hear arguments over whether Starbucks Corp. can proceed with taking over distribution of its bagged coffee as planned on March 1.
The U.S. Court of Appeals for the Second Circuit on Thursday said it would hold an expedited appeal, according to Kraft, which must file its argument by Feb. 9. A final ruling on the appeal could come by the end of the month.
Kraft planned to appeal last Friday’s ruling, where the U.S. District Court for the Southern District of New York denied a preliminary injunction that would block Starbucks from taking over the distribution from Kraft in just a couple of weeks.
The two consumer products giants are in the process of ending their 12-year distribution partnership, where Kraft distributed Starbucks bagged coffee to supermarkets and other retailers. Starbucks has made plans to take on the business starting in March.
Starbucks, which publicly disclosed it wanted out of the deal in November, says that Kraft violated several provisions of the pact, like properly stocking shelves with its coffee, which allows it to end the deal.
Kraft, meanwhile, argues that none of the violations is a material breach that would allow Starbucks to end the agreement without paying a break-up fee that some analysts estimate could top $1 billion.
The question over whether Starbucks must pay a break-up fee will be heard in arbitration court, and is separate from the preliminary injunction.
At least from what was reported previously here, it looks like a sure loser. That is, unless what was previously reported here was misleading.
Anyway, this is no big deal. Interlocutory appeals are expressly permitted on orders on motions for an injunction (28 U.S.C. sec. 1292(a)(1)).
The only thing that is consistent is that the sources to Chicago Breaking Business consistently buy the obvious b.s. that the Kraft lawyers release to the press.
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