[author: Frank DeBorde]

On May 9, 2022, the U.S. District Court for the Middle District of Tennessee dismissed a would-be purchaser’s claims against the would-be seller’s lender arising from the lender’s refusal to consent to the sale. Ruby Tuesday, Inc. agreed to sell its leasehold on a hotel property to BNA Associates, subject to approval by Ruby Tuesday’s secured lender, Goldman Sachs Specialty Lending Group, L.P., as required under the loan documents. Goldman Sachs did not consent to the sale and instead attempted, unsuccessfully, to acquire the hotel property itself from Ruby Tuesday’s landlord. Ruby Tuesday terminated its sale agreement due to the failure to obtain Goldman Sachs’ consent, and BNA then sued Goldman Sachs for intentional interference with business relations and misappropriation of a trade secret.

On the intentional interference claim, the court found that BNA failed to allege facts that, if true, would indicate that Goldman Sachs had used “improper means” to cause the termination of the sale agreement. Under Tennessee law, the court held, improper means giving rise to liability are those that “are illegal, independently tortious, or that violate an established standard of a trade or profession.” Goldman Sachs’ refusal to consent to the sale, the court found, was merely a decision not to deal with BNA and thereby preserve the status quo, a decision squarely within the “dealer’s privilege.” Tennessee’s recognition of this freedom, which encompasses the refusal to deal, effectively foreclosed BNA’s allegation that Goldman Sachs employed improper means by violating a purported established standard of the lending profession.

The court likewise dismissed BNA’s federal and state trade secret claims in which BNA asserted that the amount that BNA intended to pay for the hotel was a trade secret that Goldman misappropriated. The court found that the purchase price did not qualify as a trade secret because the sale agreement did not restrict Ruby Tuesday from sharing the proposed purchase price and contained no confidentiality provision that restricted Ruby Tuesday from sharing confidential information.

The case is BNA Associates, LLC v. Goldman Sachs Specialty Lending Group, L.P., No. 3:21-cv-481 (M.D. Tenn. May 9, 2022). BNA Associates is represented by Bulso PLC. Goldman Sachs is represented by Cleary, Gottlieb, Steen & Hamilton and K&L Gates LLP. The order is available here.