Garden Ridge Case Summary

Peter Fazio talked to Cypress/GR Houston I, LP about buying retail property, with the main tenant being a Garden Ridge store. Fazio and his agents conducted a background investigation, while doing so he found information that concerned that Garden Ridge was in poor financial health but after being certainty by Cypress that Garden Ridge had a positive outlook. Fazio went ahead and sent a letter to Cypress and sent a letter to Cypress that he is willing got buy the property for $7.67 million “based on the currently reported absolute net income of $805,040”. After which Cypress agreed to disclose all information in its possession but they failed to disclose 2 factors:
1. “A consultant for Garden Ridge had recently requested a $240,00 reduction
Fazio appealed the case because he claims that Cypress committed misrepresentation by silence and his case also falls into “the category of claims for which an action for fraudulent inducement lies”. When cypress promised to provide buyer with all information in its passion, which was in the LOI (letter of internet) that Cypress did agree too. Fazio did fulfill his own side of the agreement to conduct an investigation into the financial status of Cypress and its tenant. So when the court saw 3 more points
1. Approximately eight months before he purchased the property in September 2003 Garden Ridge had retained a consultant to assist in reconstructing and renegotiating Garden Ridge’s real estate.
2. The consultant had prepared a letter for Garden Ridge to send to landlord, a copy of that letter, states that Garden ridge was reconstructing and that as part of its reconstructing it need to reduce its occupancy costs at certain stores, including the Garden Ridge store on the property, was sent to Cypress President, Maguire on March 5th 2013
3. The consultant had contacted Cypress Director of Finances and together at Cypress on at least three other occasions to discuss the proposed rent relief, seeking an annual rent reduction of 30% or