News

Flights landlord sues restaurant CEO for late rent

Chris Russell, a bartender at Flights restaurant in Mountain View, serves a flight of mojitos. Photo by Veronica Weber.

Despite Santa Clara County's ban on evictions amid the pandemic, Flights Restaurant founder and CEO Alexander Hult is being sued by his landlord in Mountain View for back-rent payments.

The county ordinance allows tenants impacted by COVID-19 to pay back rent payments within a year with no late fees and prevents landlords from evicting residential and small-business tenants for non-payment of rent. For Hult, those payments on the Mountain View property total $27,000 per month.

"We've always paid our rent on time before," Hult told San Jose Spotlight. "But there has not been a single dollar in sales since mid-March."

Landlords for the three other Flights locations in the Bay Area, located in Burlingame, Campbell and Los Gatos, have all given Hult breaks in the rent. Unlike the Mountain View location, which has been shuttered since March, the other three restaurants have patio seating.

Hult said the lawsuit, which he was served on Saturday, "came out of nowhere," as he had been in the middle of negotiating with his Mountain View landlord.

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"I just think it's so wrong in this time," Hult said. "I understand that it's tough for (landlords) too, but filing a lawsuit in the middle of all this is unfair."

Business interruption insurance has been no help either, Hult said. Most insurance providers have told customers that interruptions from the virus don't qualify for coverage after they were overwhelmed with claims.

"This is not the small businesses' fault," Hult said. "We've done everything in our power to do business."

When the lockdowns first forced Hult to close his restaurant and created unprecedented need, Hult created the FeedtheNeed Bay Area campaign. He used community donations totaling $150,000 to provide 12,000 meals for hospital workers, low-income families and seniors sheltering in place. The community service work allowed Flights and other Los Gatos restaurants to keep some employees on payroll.

"We were able to get through the hardest parts (of the lockdown)," Hult said. But as other restaurants reopened for outdoor dining, his remained dark and business dried back up.

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Now, Hult plans to fight the lawsuit "to ensure this unjust and ruthless tactic will not be tolerated by us or other small businesses in the same situation," he wrote in a Facebook post.

"The big picture is that every single independent restaurant will close its doors ... people will lose their homes," Hult said. "I think we just need to send a very strong message to the politicians that they need to figure it out with the landlords."

Hult has launched a GoFundMe campaign to collect donations for legal fees. His Facebook post about the lawsuit was shared almost 200 times and Hult said many law firms have offered to represent him pro bono. He is planning a demonstration outside of the office of Peninsula Land & Capital, which owns the building where Flights resides in Mountain View, on Friday.

The landlord did not return calls for comment.

"At the end of the day, there needs to be a bigger discussion about what's going to happen because a million small businesses will be in this situation," Hult said.

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Flights landlord sues restaurant CEO for late rent

by / Contributor

Uploaded: Sun, Jul 26, 2020, 9:26 am

Despite Santa Clara County's ban on evictions amid the pandemic, Flights Restaurant founder and CEO Alexander Hult is being sued by his landlord in Mountain View for back-rent payments.

The county ordinance allows tenants impacted by COVID-19 to pay back rent payments within a year with no late fees and prevents landlords from evicting residential and small-business tenants for non-payment of rent. For Hult, those payments on the Mountain View property total $27,000 per month.

"We've always paid our rent on time before," Hult told San Jose Spotlight. "But there has not been a single dollar in sales since mid-March."

Landlords for the three other Flights locations in the Bay Area, located in Burlingame, Campbell and Los Gatos, have all given Hult breaks in the rent. Unlike the Mountain View location, which has been shuttered since March, the other three restaurants have patio seating.

Hult said the lawsuit, which he was served on Saturday, "came out of nowhere," as he had been in the middle of negotiating with his Mountain View landlord.

"I just think it's so wrong in this time," Hult said. "I understand that it's tough for (landlords) too, but filing a lawsuit in the middle of all this is unfair."

Business interruption insurance has been no help either, Hult said. Most insurance providers have told customers that interruptions from the virus don't qualify for coverage after they were overwhelmed with claims.

"This is not the small businesses' fault," Hult said. "We've done everything in our power to do business."

When the lockdowns first forced Hult to close his restaurant and created unprecedented need, Hult created the FeedtheNeed Bay Area campaign. He used community donations totaling $150,000 to provide 12,000 meals for hospital workers, low-income families and seniors sheltering in place. The community service work allowed Flights and other Los Gatos restaurants to keep some employees on payroll.

"We were able to get through the hardest parts (of the lockdown)," Hult said. But as other restaurants reopened for outdoor dining, his remained dark and business dried back up.

Now, Hult plans to fight the lawsuit "to ensure this unjust and ruthless tactic will not be tolerated by us or other small businesses in the same situation," he wrote in a Facebook post.

"The big picture is that every single independent restaurant will close its doors ... people will lose their homes," Hult said. "I think we just need to send a very strong message to the politicians that they need to figure it out with the landlords."

Hult has launched a GoFundMe campaign to collect donations for legal fees. His Facebook post about the lawsuit was shared almost 200 times and Hult said many law firms have offered to represent him pro bono. He is planning a demonstration outside of the office of Peninsula Land & Capital, which owns the building where Flights resides in Mountain View, on Friday.

The landlord did not return calls for comment.

"At the end of the day, there needs to be a bigger discussion about what's going to happen because a million small businesses will be in this situation," Hult said.

Comments

Jes' Sayin'
Another Mountain View Neighborhood
on Jul 26, 2020 at 9:56 am
Jes' Sayin', Another Mountain View Neighborhood
on Jul 26, 2020 at 9:56 am
5 people like this

This landlord have a name?


Jane
Rengstorff Park
on Jul 26, 2020 at 10:47 am
Jane, Rengstorff Park
on Jul 26, 2020 at 10:47 am
17 people like this

Emergency ordinances concern evictions for non-payment of rent - not lawsuits for breach of contract for nonpayment. The provisions concerning paying back unpaid rent later limit only the ability of a landlord to use a 3-day eviction notice (pay past due rent or quit) demanding all past-due rent as soon as the conditional moratorium ends. Instead of seeking money from suckers using GoFundMe, the tenant should go see a lawyer who will actually read the ordinances involved.


Jane
Rengstorff Park
on Jul 26, 2020 at 11:27 am
Jane, Rengstorff Park
on Jul 26, 2020 at 11:27 am
15 people like this

Read the county ordinance. As updated, it applies to residential and commercial EVICTIONS - but not to the obligation to pay the rent except in the context of suing for eviction (unlawful detainer). The City of Mountain View eviction moratorium only applies to residential units and, again, only to evictions. The case against this corporate tenant appears online at the court website. The LLC suing is identified. Its landlord is represented by a business and landlord-tenant law attorney in San Rafael named Brendan Brewer - a lawyer since 1994. The corporate tenant here should GoSeeCompetentLawyer. If ignorant lawyers have really offered to represent the tenant without charging, why would the tenant need money for a lawyer?


JR
another community
on Jul 26, 2020 at 11:43 am
JR, another community
on Jul 26, 2020 at 11:43 am
15 people like this

Frankly I hope both parties bankrupt each other. Mountain View downtown has been looted by rent-raising landlords and overpriced, phony "small businesses" like Flights that cater to corporate business, not the community. They ran Fishscapes, Bierhaus, and many others out of town, now enjoy the bed you have made.


Jane
Rengstorff Park
on Jul 26, 2020 at 12:57 pm
Jane, Rengstorff Park
on Jul 26, 2020 at 12:57 pm
8 people like this

By the way, Mr. Hult is NOT a defendant listed in the case online. The plaintiff -landlord is Menlo Land & Capital II, LLC. The listed defendants are Flights Restaurant Group, Inc. and Flights Holding, LLC (SUPERIOR COURT CASE NO. 20CV368193 filed July 10, 2020). See public portal - santa clara county cases - insert case number.


Jane
Rengstorff Park
on Jul 26, 2020 at 1:09 pm
Jane, Rengstorff Park
on Jul 26, 2020 at 1:09 pm
8 people like this

And another thing. I see in the GoFundMe link that Mr. Hult "of Los Gatos" is the "organizer" and there it is claimed that the lawsuit was filed after Hult pleaded with the landlord to compromise. The claim in the article is that the lawsuit came as a surprise. I also see that Mr. Hult has collected $2,010 toward his goal of $100,000. Contributors could demand their money back. But figure they would need to sue to ever get it!


Jane
Rengstorff Park
on Jul 26, 2020 at 1:31 pm
Jane, Rengstorff Park
on Jul 26, 2020 at 1:31 pm
16 people like this

Also online at Cal. Sec of State business search: Mr. Hult had 4 corporations using the name Flights Restaurant (Los Gatos, Campbell, Burlingame and Mountain View but in 2019 merged them in a Nevada corporation named "Flights Restaurant, Inc." That is the thing about corporations (and limited liability companies). They can be here today and gone tomorrow. They can stop paying on a contract and the other party may never recover a dime. I see this article was NOT WRITTEN BY A REPORTER FROM THE MOUNTAIN VIEW VOICE. It lists the author as a "contributor" to "San Jose Spotlight." A real reporter would have investigated.


Jane
Rengstorff Park
on Jul 26, 2020 at 1:37 pm
Jane, Rengstorff Park
on Jul 26, 2020 at 1:37 pm
16 people like this

Checking online I see the "contributor" who is credited with writing the article is a journalism student at Boston College. Hopefully, she will learn to do some basic research before writing articles as an actual journalist.


Jane
Rengstorff Park
on Jul 26, 2020 at 1:52 pm
Jane, Rengstorff Park
on Jul 26, 2020 at 1:52 pm
14 people like this

Correction
The author says online she is a journalism student at Boston University - not Boston College. Apologies to Boston College.


Jane
Rengstorff Park
on Jul 26, 2020 at 2:14 pm
Jane, Rengstorff Park
on Jul 26, 2020 at 2:14 pm
16 people like this

What the heck is "San Jose Spotlight"? Online it appears to be a new, progressive non-profit funded by donors including - get this - $32,000 of your money from the Santa Clara Valley Water District. Investigate that.


Jane
Rengstorff Park
on Jul 26, 2020 at 3:07 pm
Jane, Rengstorff Park
on Jul 26, 2020 at 3:07 pm
4 people like this

I see a story in the San Jose Mercury News dated July 23 but updated early on July 24. It refers to service of the lawsuit on Mr. Hult's wife in Los Gatos. That is said to have occurred "Saturday morning" but it does not say WHICH SATURDAY. Yesterday was Saturday the 25th. Must have been an earlier Saturday. Some attorney in the County Counsel's Office reportedly told the Mercury News reporter that landlords can sue for damages (unpaid rent) - but a "wrongful" lawsuit could give rise to a counterclaim. The reporter evidently did not know enough to keep asking questions. There is nothing in the county ordinance against suing for unpaid rent - except in an eviction action. Read it.


Sue the Virus
Another Mountain View Neighborhood
on Jul 26, 2020 at 4:24 pm
Sue the Virus, Another Mountain View Neighborhood
on Jul 26, 2020 at 4:24 pm
10 people like this

Hey,Stella, great way spew and seed anarchy:(

How do you define someone as "rich" that needs to be punished? Someone you perceive that has more money than you.

It's a fact, homeowners are in trouble, renters are in trouble. The unemployed are in trouble. Renters that own Commercial Properties are in trouble. Homeowners with Rental Properties are in trouble. Everyone is in trouble, except those in Public Service with guaranteed salaries and those with "fat-forever" pensions, courtesy of taxpayers, they're all good.

Meanwhile the virus doesn't differentiate/care and our elected leaders are busy rearranging the deck chairs on the Titanic, both Republicans and Democrats alike. The blame game is fun but not productive nor protective.

There is no free rent (residential or commercial). Many lessors (Commercial and Residential) are working with their tenants and many are not, some cannot or will not....they have similar hardship issues, and the law states they must act/file now in order to attempt/recover their lost income at some point in the future, when the arbitrary guidelines/moratoriums end. Don't hate the player, hate the game. Some will follow the law and others like (Stella),enjoy stoking the seeds of anarchy out of ignorance.

Don't despair, don't forget, you can head over to Gavin's winery. No substantial meals required and you can reserve your picnic table for a max of 6 friends/strangers. You can invite someone to give you a haircut or a mani-pedi at the same time. Good Times..with wine (no food required) in Napa, courtesy of your Governor! His $600K income from PlumpJack Winery is reassuring (to him). Sorry you didn't know....

Gavin's new Mantra. "Wash your hands and drink wine all afternoon at my place". "You do not need to be socially distanced from you friends and no mask required, so long as you sit at our picnic tables"

Never over estimate the intelligence of the electorate, junk journalists or kids wasting their parents money.


Jane
Rengstorff Park
on Jul 26, 2020 at 6:08 pm
Jane, Rengstorff Park
on Jul 26, 2020 at 6:08 pm
11 people like this

While "Stella," the journalism student, failed to investigate for the article, it appears to have been the corporate operator Alexander Hult who provided misinformation and spin. The Mercury News article says Hult worked deals with his corporation's other commercial landlords - not that nothing has been paid. Maybe this landlord was too hard-nosed. Or maybe this landlord has more information about Hult. But the idea that real people would donate money to a guy operating a business through a corporation (that I guess is doing nothing) for a lawyer (the guy claims will be free - "pro bono") while misrepresenting the law, was a bit much to keep quiet.


Jeff B
Another Mountain View Neighborhood
on Jul 27, 2020 at 3:16 pm
Jeff B, Another Mountain View Neighborhood
on Jul 27, 2020 at 3:16 pm
10 people like this

I'm not a fan of the landlord. I was business owner in Mountain view for 35 years and when the building I rented for decades was sold to Menlo Land and Capitol they let me continue my rent payments on a month to month lease but would never give me an answer of how long I could stay or what they planned for the property. A number of months later they surprised me with a 30 day notice to vacate the property. I would have been agreeable to a higher rent but I wasn't even given the option, they had bigger plans. 30 days wasn't enough time to find another location in this business climate so I was forced to liquidate and remove all of my equipment. It was the most stressful time of my life. I had hundreds of customers that I felt I had abandoned as well. I was the only stand alone auto detail shop in all of Mountain View, Los Altos and Palo Alto and felt the community lost a valuable service.
I am a fan of Alexander Hult. When the shelter in place started he turned his Los Gatos Restaurant into a drive through store when so much was closed and sold everything from meals to grocery's and even toilet paper when you couldn't get it in a very safe manner, you never had to get out of the car. He also let other local businesses sell products through his store when they couldn't open. I've met this former San Jose Shark and he cares deeply about his community and really wants to help wherever he can.


Jane
Rengstorff Park
on Jul 27, 2020 at 5:35 pm
Jane, Rengstorff Park
on Jul 27, 2020 at 5:35 pm
6 people like this

I did see he was selected by the Sharks but never played for them. But cute trick. The problem is that the article Hult generated is bunk. Contrary to the article, Hult was not sued. He was not surprised by the lawsuit against his Nevada corporation and a CA LLC,. He claimed to the want-to-be reporter shown as the author of the article that attorneys had offered to help him for free. But is still sought GoFundMe donations for legal fees. And bottom line. The lawsuit for breach of contract is not barred by the county ordinance. And telling readers otherwise is a grave disservice.


The Business Man
Old Mountain View
on Jul 27, 2020 at 7:35 pm
The Business Man, Old Mountain View
on Jul 27, 2020 at 7:35 pm
4 people like this

Jane,

You sound like either your the landlord, or someone with a personal grudge against the restaurant.

You attack everything you can regarding this story. WHY? I think you have money depending on the outcome. Or worse, you want to take over the restaurant, is this possible?


Jane
Rengstorff Park
on Jul 27, 2020 at 10:06 pm
Jane, Rengstorff Park
on Jul 27, 2020 at 10:06 pm
7 people like this

Neither. The article is FAKE NEWS that stems from a story-telling corporate "victim" looking for sympathy and donations and a journalism student not ready for prime time. The bad news is that now landlords know, if they did not previously, that the county's moratorium on evictions does not bar a lawsuit for unpaid rent - plus attorney fees under most leases. Could be trouble for some tenants - all thanks to some guy named Alexander Hult.


Jerry G.
Old Mountain View
on Jul 27, 2020 at 10:51 pm
Jerry G., Old Mountain View
on Jul 27, 2020 at 10:51 pm
5 people like this

This story is really confusing and frustrating. Is Mr. Hult trying to make a legal case or an ethical case? Court cases are based on fact (i.e. lease agreements, existing laws, temporary laws, case law, etc.) and not on emotions (i.e. ethical and morality arguments). I would hope a lawyer that has read all of the facts of the case would be blunt with Mr. Hult if the plaintiff has a good chance of collecting past rent based on the facts.
I also think it is important to consider the rate of expansion Mr. Hult chose in a high COL area. From 2017 to the present it looks like he has opened up an additional 4 restaurants. 4 of the 5 current restaurants are in the Bay Area and in affluent cities. Observing restaurant location, decor and menu it appears that they are shooting for more of a fine dining atmosphere than casual. None of this is wrong of course; in the best of times he took a calculated risk and it seems like it was working out great. He had no idea this was coming when you signed 4 commercial leases within 3 years in an area with one of the highest COL, in cities that are known to be more expensive than surrounding cities. I wanted to be on his side when I read the headline but then I started to read his comments as if he was a victim. He chose to expand, you chose your business model, you chose your locations, etc. I get where you are coming from; if I was a landlord I would try my best to handle this situation the way you said your other landlords responded by working something out. They were not required to do it but were able to do something that made both parties happy. I think they should do the ‘right thing’ but for some reason the MV landlord is sticking to the signed lease agreement. I get the impression that people automatically assume the MV landlord is driven by greed. Maybe they are. But I don’t think Alex knows exactly what type of position the pandemic has put them in as well. Maybe both are in really bad positions?


Jerry G.
Old Mountain View
on Jul 27, 2020 at 11:02 pm
Jerry G., Old Mountain View
on Jul 27, 2020 at 11:02 pm
3 people like this

Alex wanted to get on the ice with the big boys. He should play through.

He bet on capitalism and fast expansion.......


The Business Man
Old Mountain View
on Jul 28, 2020 at 3:56 am
The Business Man, Old Mountain View
on Jul 28, 2020 at 3:56 am
Like this comment

In response to Jane:

Using the term “FAKE NEWS” obviously describes your political point of view.

And YES the politicians based their moratoriums on WISHFUL thinking. That the COVID would have been under control in 1 to 2 quarters tops. That was irrational and because of it they made in effect financial traps. The medical professionals under Donald Trump were not allowed to act for the best interests of HEALTH. They trapped themselves by selling the best case scenario regarding COVID. WHY?

Because the ugly truth is that COVID is a pandemic and is not under any control. That is required putting a freeze on all economic activities which threatened the “social order” of the government and the private sectors.

Just understand that he HHS, NIH, and the CDC are subordinate AGENCIES of the politics in the U.S. Look at how poorly it responded to HIV, the fact was the French discovered HIV and had a test long before the U.S. did. In fact Dr. Gallo was caught STEALING their research to try to make it look like they discovered HIV. THEY DIDN’T.

And now the British have a possible treatment vaccine before we did. The fact is when science is subordinate to politics, the science gets delayed and tainted.

The facts are the “moratoriums” should not have required to make up payments at all. This is just a trap, and the politicians knew it was. They set up the country for another economic tsunami to hit even before the COVID is being controlled. WHY?

Because most businesses are operating as “zombies” they do not make enough money for the long term to reduce or eliminate their debts. They are running on credit that under the COVID is not being paid. The wave of bankruptcies has already started, just look up retail bankruptcies and you see large retail operations going under. This is going to wipe out a lot of credit based economics because those debts are not going to be repaid.

And the PPP idea was just a disaster because it is giving away free money to companies that will NEVER pay it back. The BIGGEST rip off in American history.

COVID is driving the ship, it hit the iceberg and we are sinking, and the Captain (DONALD TRUMP) is lying is you know what off.


Jane
Rengstorff Park
on Jul 28, 2020 at 9:08 am
Jane, Rengstorff Park
on Jul 28, 2020 at 9:08 am
6 people like this

Except for suggesting that only Trump supporters use the term FAKE NEWS, I agree with your points. I am no Trump supporter. Not among your points is any claim that the county's eviction moratorium prevents lawsuits for damages stemming from unpaid rent. It does not. Just the opposite. (Click the link in the article above which goes to a story about the county ordinance as originally adopted and then the link to the ordinance in that story.) The board of supervisors has extended the duration of the eviction moratorium - that's all. Are they politicians? You bet. But as another comment above highlights, the pandemic has created many victims. Alexander Hult is one. But his corporate financial woes are nothing compared to the harm befalling others. Donating to his corporate enterprise may not be the best use of one's money. Donors decide. But they should be told the relevant facts - not fed FAKE NEWS.


Jerry G.
Old Mountain View
on Jul 28, 2020 at 10:51 am
Jerry G., Old Mountain View
on Jul 28, 2020 at 10:51 am
2 people like this

The way this article is written and a couple points by Jane in the comments make me think that Alex's GoFundMe campaign is breaking site rules. In the article, he says he is soliciting donations for legal funds and then in the next sentence he says that many attorneys have offered to take the case Pro Bono. He should not be able to ask for money for legal fees if it is being covered Pro Bono.
The other issue is one that Jane brings up in the comments. I feel Alex is not being completely forthcoming about the way he has chosen to structure his businesses. He has consolidated his previous LLC's into a Nevada Corporation. This is important because this separates the owner from the corporation. The Flights Restaurant Group Inc. is being sued. The corporation is responsible for paying legal fees, not the owner. Alex should not be able to solicit donations, as stated for legal fees, as an individual.


The Business Man
Old Mountain View
on Jul 28, 2020 at 12:22 pm
The Business Man, Old Mountain View
on Jul 28, 2020 at 12:22 pm
Like this comment

In response to Jane,

I retract my argument regarding the term "FAKE NEWS" very sincerely, I apologize without reservations.

I do want quality news reports as well.

But the real problem COVID is not being fixed. I just want everyone to be prepared for the continuing permanent damage occurring both health wise and economic.

Our leaders and our businesses are NOT responding the way it is REQUIRED to mitigate the situation for the long run. And EVERYONE is getting damaged.


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