beer wars

if you think about it, the alcohol manufacturing business is really the getting-alcohol-into-bloodstreams business with more paperwork and logistics. moving down the value chain can reduce these constraints, and so, if you’re a brewing company, you should probably run a chain of pubs on the side. the pubs provide you with a captive market for your brews as well as a diversified income stream.

in fact, you don’t even need to start your own chain for this - you can just buy one off the market. or can you? things like pub chains tend to exist at the lowest end of the liquidity spectrum, which is why you can’t walk into a bar and buy it outright.

the delhi high court kind of agrees? last month, it issued an injunction preventing a craft brewery’s investors from selling shares of a pub chain that were pledged to them.

in theory, getting an injunction - an emergency order preventing a party from enforcing its contractual rights - requires showing that:
(i) the other party likely lacks the right to proceed against you;
(ii) you’ll suffer more if the right is exercised than your counterparty will if it’s not; and
(iii) you’ll be put to irreparable harm if the injunction isn’t granted.

honestly, i find these criteria a little strange. figuring out whether one party can proceed against another is kind of the entire point of the legal process? the second and third criteria seem like tautologies?

in practice, getting an injunction mainly requires you to establish irreparable harm. here, a useful rule of thumb is that if a harm can be quantified in monetary terms, it’s likely not irreparable because you can always be paid for it. this rules out getting injunctions on things like money, debts, and liquid securities. conversely, if you can’t arrive at a dollar amount for your loss¹, you’re in luck! i hope you own a nascar team, a one-of-a-kind diamond, or twitter.

and so, if you were the brewery’s lawyer, i hope you told the court that forcing your client to part with an irreplaceable and highly illiquid asset that’s responsible for a third of their top line would lead to even more payment defaults. it’s a great line of argument to take! they should hang it in the louvre, now that there’s space.