September 18, 2006
Wendy's and Hedge Fund Duke it Out Over Bankrupt Franchisee . . .
A South Carolina paper reports that a federal bankruptcy judge has agreed to the request of a Connecticut-based hedge fund, SPCP Group LLC, to appoint a trustee to run WenAmerica LLC, the owner of more than 50 now-closed Wendy's restaurants, but rejected SPCP's effort to force franchisor Wendy's International Inc. to continue to supply the franchised stores. SPCP claims that WenAmerica owes it about $3.1 million and wants the stores to reopen so that they can be sold as an 'ongoing business,' but Wendy's asserts that it officially terminated WenAmerica's franchise agreement before it went into involuntary bankruptcy, so that it has no supply obligations under the automatic bankruptcy stay.
Posted by franchiselawblog at September 18, 2006 03:53 PM