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Longtime Sixth Street music venue the Parish claims landlord attempting 'hostile takeover'

Sixth Street live music venue the Parish is suing its landlord, which locked the venue's owners out of the space last month over a dispute about rent payments.

The 14-page lawsuit filed in Travis County District Court on Oct. 15 alleges that Whimsical Notions, Inc., which owns the property at 214 E. Sixth St., created "a fictional default in the lease" to cease operations at the venue.

After being closed for more than a year because of the coronavirus pandemic, the Parish had reopened this summer, presenting more than two dozen events from late July to early October. Many more concerts booked for this fall have been moved to other venues since Oct. 12.

Live music venue the Parish has been a downtown fixture for two decades on the second floor of the building at 214 E. Sixth St.

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Heard Entertainment, which also owns Red River Cultural District venue Empire Control Room & Garage, acquired the Parish business — but not the building — from previous owner Doug Guller in December 2017 for $376,445, according to court documents. The Parish is on the building's second floor; Guller, who is not part of the group that owns the building, still operates the restaurant Happy Chicks and the bar BBG's at the building's street level. 

Five days after the lawsuit was filed, the two parties agreed to a restraining order that temporarily disallows Whimsical Notions from "communicating or conducting business with the aid or use of the trade names associated with the Parish."

What does each party want in the Parish dispute?

The Parish seeks an injunction that would prevent Whimsical Notions from conducting business in Travis County using the Parish name or capitalizing on its goodwill. A hearing date is set for Dec. 2. The two parties potentially could settle out of court before then.

Whimsical Notions also filed a four-page counterclaim on Oct. 20, alleging the Parish "failed to pay the monthly rent and other fees" outlined in the lease.

Both parties are seeking "monetary relief" of more than $1 million, as well as potential recovery of court costs and attorney fees.

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What does the Parish's lawsuit against the landlord claim?

The Parish's original filing against Whimsical Notions claims the landlord promised "to credit rent for ongoing improvements" made during the pandemic, then "reneged on their promises and agreements." 

The suit goes on to allege: "Just as the venue was poised to emerge from the COVID-19 pandemic, (Whimsical Notions) hatched a plot to commandeer the business by breaking promises, manufacturing a default on The Parish's lease, then falsely informing The Parish's business contacts that The Parish no longer operates the venue."

After the pandemic forced the Parish to close in March 2020, the venue claims that the landlord agreed to defer rent payments until the pandemic was resolved. After February's winter storm caused damage to the roof and HVAC system, the Parish says it sought to make "additional investments into the space," including a new bar, bathroom improvements and a VIP area. Those renovations were budgeted at more than $200,000, according to the lawsuit.

The Parish also claims that Whimsical Notions "received insurance proceeds" for the storm damages "but has yet to complete any repairs to the premises."

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Stephen Sternschein, managing partner of the Parish and Heard Entertainment, also filed an affidavit with the court attesting to the lawsuit's allegations. He attached a string of September 2021 emails between Sternschein, Whimsical Notions president Matt Reppert and Heard Entertainment chief operating officer Dave Machinist that detailed their conversations about the renovation costs.

Sternschein wrote to Reppert on Sept. 21 that the Parish could not "continue with the renovations without your explicit assurance that back rent is abated". He added that the Parish had already spent over $100,000.

Also at issue: utility payments. Utility costs for the property are shared by building tenants the Parish and ATX Brands (former Parish owner Guller's company). The suit alleges that in August, ATX Brands sought more than $18,000 from the Parish "for at least six months of utilities when The Parish was not operating and not using any utilities whatsoever," while ATX Brands was operating its street-level Happy Chicks and BBG's businesses. 

The Parish also alleges an attempt at a 'hostile takeover' of their brand

The filing further claims that Whimsical Notions "has usurped and infringed upon" the Parish's trademarks in order to confuse and mislead the venue's business connections.

That apparently includes the recent establishment of a business entity named The Parish ATX, LLC — as opposed to the venue's business, which is officially titled The Parish Austin, LLC. The suit claims that Whimsical Notions, in an email, "dictated that Kerry Mosser, (Whimsical Notions) agent, would 'assume the terms of the Lease'" via the new Parish ATX entity.

Mosser's page on the website LinkedIn lists him as "Chief Executive Officer at The Parish ATX, LLC." State filings show that The Parish ATX, LLC, was incorporated in Travis County on Oct. 13.

The Parish also claims in the lawsuit that Whimsical Notions "demanded that The Parish turn over all social media accounts for the business to Mr. Mosser, and that The Parish would pay an unspecified room charge per show for these 'courtesies.' Unsurprisingly, the Parish has resisted this attempt at a 1980's style hostile takeover."