In the last issue of Franchise Alert, we discussed how to spot signs of franchisee financial distress at an early stage. Here, we present some steps franchisors can take to deal with financially distressed franchisees.

Update Files

Part I: Spotting a Financially Troubled Franchisee in Time to Do Something about It

Coping with the Insolvent Business Partner

REGEN CAPITAL I, INC. v. UAL CORP. (February 18, 2011)

Can a debtor seeking debtor-in-possession (“DIP”) financing under Section 364 of the Bankruptcy Code grant a lender a lien on a leasehold interest in the face of an express anti-hypothecation provision in the underlying lease?

Some legal commentators have lamented the extent to which lenders have been able to use debtor in possession (“DIP”) financing arrangements to gain control over an entire Chapter 11 case.

REDMOND v. FIFTH THIRD BANK (October 20, 2010)

CENTRAL STATES SOUTHEAST AND SOUTHWEST AREAS PENSION FUND v. O'NEILL BROS. TRANSFER & STORAGE (August 31, 2010)

The UK Supreme Court, which is the UK's highest court, has handed down its long-awaited decision in Belmont Park Investments Pty Limited v BNY Corporate Trustee Services Limited and Lehman Brothers Special Financing Inc [2011] UKSC 38, in which the Court considered the validity and enforceability of so-called "flip" clauses under English bankruptcy law.

On 25 January 2010, the United States Bankruptcy Court handed down its much anticipated decision in relation to an action brought in that court by two Lehman Brothers entities (the Lehman entities) against BNY Corporate Trustee Services Limited (BNY) (the US Decision).