Kate Spade LLC v. Vinci Brands LLC

Background

The order addresses related actions involving Vinci Brands LLC, Coach Services, Inc., and Kate Spade LLC. In an earlier opinion and order, the court denied Vinci’s motion for a preliminary injunction in large part and granted it in part. The court granted KSNY’s—Coach Services and Kate Spade, together—in large part and denied it in part. Vinci then moved for reconsideration of the portions of that earlier ruling that denied Vinci relief and granted relief to KSNY.

Standard for reconsideration

The court explained that reconsideration is available only when the moving party identifies an intervening change in controlling law, newly available evidence, or a need to correct clear error or prevent manifest injustice. It is not a way to relitigate previously decided issues, present new theories, or obtain another hearing on the merits. The court also stated that it generally will not consider new arguments or evidence that could have been presented before the earlier decision.

Vinci’s contract arguments

Vinci argued that it did not breach Section 11.10 of the license agreement, which required it to notify Kate Spade promptly if a lender issued a default notice and then accelerated debt or exercised remedies against Vinci’s assets. Vinci contended that its debt under the Siena Loan Agreement had not been accelerated.

The court rejected that argument as previously considered. It held that notices of proposed sales of collateral by Siena Lending Group, LLC and Case-Mate, Inc. showed an existing acceleration because the sale proceeds were to satisfy all obligations and indebtedness owed by Vinci. The court also noted that Vinci had waived its right to receive a separate notice of intent to accelerate or notice of acceleration under the Siena Loan Agreement. Independently, the court held that Siena and Case-Mate had exercised default remedies against Vinci’s assets by transferring funds from Vinci’s bank account. Notice to KSNY from Siena, rather than directly from Vinci, did not eliminate Vinci’s obligation under Section 11.10 to notify Kate Spade.

Vinci also argued that it did not breach Section 11.8, which required it to pay indebtedness when due, subject to stated exceptions. The court found that Vinci’s argument that “any indebtedness” excluded debts owed to Kate Spade was new and, in any event, inconsistent with the provision’s plain meaning. The court declined to consider Vinci’s separate argument that good-faith disputes excused its payment obligations because that argument was also new on reconsideration.

Force majeure and royalty arguments

Vinci argued that a force majeure condition had not ended by July 18, 2023, when Kate Spade again terminated the license agreement. The court found that this issue had already been considered, including through testimony at an evidentiary hearing. The court had previously credited evidence that Vinci was able to pay KSNY at least some of the amounts it owed by the time of the second termination.

The court also rejected Vinci’s new argument that its ability to pay Kate Spade depended entirely on ACS Group Acquisitions LLC allowing Vinci to use loaned funds for that purpose. The court found that testimony by Vinci co-owner Steve Latkovic suggested Vinci could have paid Kate Spade after receiving the funds. Finally, the court stated that it had already considered and rejected Vinci’s argument that its payment failures were excused by KSNY’s alleged obligation to renegotiate guaranteed minimum royalties. The court had credited evidence that the parties renegotiated the payment schedule and that Vinci repeatedly acknowledged the amounts it owed.

Ruling

The court denied Vinci’s motion for reconsideration. The order directed the Clerk of Court to close the motions at Dkt. 163 in Case No. 23 Civ. 5138 and Dkt. 110 in Case No. 23 Civ. 5409. Judge Lorna G. Schofield signed the order.