Avaya wants out of S.F. stadium suite, not too impressed with 49ers either

Avaya says $350,000 payment, due this month, is a burden on Avaya's estate and the company

avaya-wants-out-of-s-f-stadium-suite-not-too-impressed-with-49ers-either
Reuters

Staring at a Chapter 11 bankruptcy, Avaya told the court last week it wants out of the$350,000 annual payment for its San Francisco 49ers stadium suite and that the team’s recent miserable performance has made the suite harder to sell off.

According to a Reuters report, the cost of the license for the suite, $350,000 due this month, is a burden on Avaya's estate and the company is seeking court permission to reject the agreement which was signed for 10 years.

+More on Network World: Cisco, Mitel, NEC and others are targeting Avaya’s customers as the networking company goes through Chapter 11 bankruptcy+

According to the legal news and analysis website, Law360.com, which first broke the story, Avaya is none too happy about the team’s recent performance either.

Law360 wrote that Avaya said in court: “Indeed, the San Francisco Forty Niners ended their 2016 football season with a 2-14 record, following a 5-11 campaign in the 2015 and an 8-8 record in 2014,” the company said. “The San Francisco Forty Niners have also replaced their head football coach for the 3rd time during this time span. The debtors have, therefore, determined to reject the suite contract to relieve their estates of the ongoing costs arising under the suite contract.”

In its bid to back out of the suite agreement and avoid paying to watch what could possibly be another disappointing football season in San Francisco, Avaya said it has satisfied the “business judgment” standard to cancel an executory contract of a debtor. Without a rejection, the contract “imposes an ongoing obligation on the debtors and their estates that constitutes an unnecessary drain on the debtors’ resources compared to any benefits associated therewith,” the company said.

In a statement to Network World, Avaya said: “The suite at Levi's Stadium is not a sponsorship deal nor does the relationship include Avaya technology. The suite was found to be an expense that was under-utilized as interest from customers and business partners waned corresponding with the 49ers' recent performance.”

Avaya filed for chapter 11 bankruptcy protection in January listing $5.52 billion in assets and $6.36 billion in debts, according to the bankruptcy case, which was filed in New York.

John Sullivan, CFA, VP and Corporate Treasurer of Avaya told Network World at the time: “How did we, Avaya – one of the top competitors in business communications – arrive at this juncture? After looking at the multiple options of how to deal with our debt, we decided it was a critical next step in our transformation from a hardware company to a software and services company and the best path forward for our customers, partners and employees.

Our business is healthy and performing well. We have successfully transformed from our hardware heritage, with 75% of revenue now generated by software and services. All our recent products are virtualized and run on various hardware platforms. We continue to be number one or two in the key markets we serve, and are at the beginning of new product cycles across our business.”

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