Sham Burger King Franchisee Bankruptcy Stuns, but Avoids Harm

A “fraudulent” bankruptcy petition submitted on behalf of a major Burger King franchisee caught lawyers by surprise but showcased the ability of bankruptcy courts to quickly root out shady conduct.

Carrols Corp., the largest Burger King franchisee in the US, had at least five bankruptcy petitions submitted in its name over the past week by an individual with an apparent history of frivolous legal actions. The company quickly said the bankruptcy petitions were fake, and its general counsel said it’s “not a financially troubled company.”

Though abuse of the bankruptcy system isn’t unheard of, the Carrols case was notable for the audacity of the filer, who could face ramifications for his actions.

“I feel like I’ve seen some pretty insane things, but this is new to me,” said Stacy A. Lutkus, a McDermott Will & Emery restructuring partner who worked as a clerk to the judge who oversaw the Lehman Brothers bankruptcy.

Faking Bankruptcy

The Carrols petitions, filed under Chapter 15 of the US bankruptcy code, appear to have been mailed in by Robert W. Johnson of Buffalo, N.Y. Johnson appears to have a prolific history of submitting pro se lawsuits, including against Donald Trump, Meta Platform Inc.‘s Facebook,

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Bankruptcy Filings Spark Questions About Restaurant Franchisee Outlook | Franchise Insights


Emilee Wentland

Filing for bankruptcy is a last resort for franchisees. There are often a variety of remedies franchisees can try before taking that step, Lathrop GPM attorney Robert Haupt said. “You can be a bankruptcy-eligible client, who has no intention of filing for bankruptcy, or you could walk into my office and say, ‘Hey, I need a bankruptcy.’ And I’ll say, well, not so fast,” Haupt said.

At any given time, Haupt could be dealing with hundreds of bankruptcy cases at varying stages in the process. In 2023, attorneys noticed more franchisees filing for bankruptcy compared to recent years. Three major Burger King franchisees, among others, filed for Chapter 11 bankruptcy protection.

An 8.7 percent increase in systemwide sales at Burger King in 2022 shows macro sales growth for the brand with nearly 20,000 stores across the globe. But the three franchisees that filed last year cited slower foot traffic, higher costs and low sales.

Franchisees TOMS King, Meridian Restaurants Unlimited and Premier Kings filed for bankruptcy in 2023, for a total of 278 Burger King restaurants impacted. Premier’s sibling company, Premier Cajun Kings, owned 30 Popeyes, 11 of which closed before it filed March

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NJ among states seeking Supreme Court review of controversial bankruptcy tactic

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A bipartisan group of 25 attorneys general, including New Jersey’s Matthew Platkin, is urging the United States Supreme Court to stop well-off companies from using bankrupt shell companies to resolve lawsuits.

In a Jan. 22 amicus brief, the AGs asks for the reversal of a June 2023 ruling from the 4th U.S. Circuit Court of Appeals that allowed pulp-and-paper maker Georgia-Pacific to avoid litigating tens of thousands of asbestos lawsuits while the company’s subsidiary, Bestwall, remains in bankruptcy.

The 2-1 decision upheld a key element of a controversial legal tactic known as the Texas two-step, in which a corporation spins off liabilities into a newly created subsidiary and then files that unit for bankruptcy.

Georgia-Pacific, one of the world’s largest manufacturing firms, pioneered the strategy in 2017, which paused 64,000 lawsuits claiming the company’s plaster construction products contained cancer-causing asbestos.

In the brief, the AGs contend that Georgia-Pacific is abusing the U.S. bankruptcy system, using it to shield assets from people who have been harmed by preventing lawsuits from moving forward without subjecting the entire company to bankruptcy.

“Wealthy companies that engage in wrongdoing should not be able to get off the hook by cheating the

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Rudy Giuliani targets Donald Trump for ‘unpaid legal fees’ in new bankruptcy filing

Donald Trump’s former lawyer Rudy Giuliani has listed a claim against the one-term president over unpaid legal fees in a new bankruptcy filing.

The ex-New York City mayor includes a “possible claim for unpaid legal fees against Donald J Trump.” in the 26 January filing, which states that the amount is “undetermined.”

Mr Giuliani filed for bankruptcy last month, days after a federal judge ordered him to “immediately” pay more than $148m to a pair of Georgia election workers a jury determined he defamed.

Mr Giuliani represented Mr Trump in a string of unsuccessful lawsuits contesting the results of the 2020 election that he lost to Joe Biden.

Mr Trump’s legal fees owed to Mr Giuliani have previously been reported. The New York Times wrote in August 2023 that “Mr Trump has never explicitly told Mr Giuliani why he is effectively stiffing him, but the former president has pointed out that he lost the cases related to the election.”

Rudy Giuliani speaks to members of the media on  21 January 2024 in Manchester, New Hampshire (Getty Images)

Rudy Giuliani speaks to members of the media on 21 January 2024 in Manchester, New Hampshire (Getty Images)

The newspaper reported that the former president told his aides that he didn’t want Mr Giuliani to receive “a dime” unless he

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Cardi B’s Lawyers Allege Tasha K Hid Offshore Accounts

Tasha K, Cardi B, lawsuit

New court documents caused attorneys to accuse the vlogger of allegedly failing to disclose secret accounts when she filed for Chapter 11 bankruptcy.

The legal feud between rapper Cardi B and YouTuber Tasha K, whose real name is Latasha Kebe, escalated when new court documents revealed that the rappers attorneys are accusing the vlogger of hiding secret offshore accounts and allegedly failing to disclose them when she filed for Chapter 11 bankruptcy.

The internet personality cardi-b-defamation-verdict/” title=””filed bankruptcy back in May 2023 claiming she had less than $60,000 in assets, Billboard reported. But, according to documents tasha-k-secret-offshore-accounts-bankruptcy-battle/” title=””obtained by XXL magazine, Cardi’s lawyers claimed Tasha K and her husband, Cheickna Kebe, were not truthful about “the existence of offshore and domestic trusts” created for their benefit.

The “Money” rapper’s lawyers pointed out that in depositions, both Tasha K and her husband testified they did not have any savings accounts, IRAs, or trusts in their names or their children’s names. However, XXL added that Cardi’s attorneys say they have uncovered “multiple domestic and offshore trusts” that were allegedly never disclosed by Tasha K, including at least one trust where $30,000

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