With REDgroup administrators, Ferrier Hodgson, desperately searching for a buyer for REDgroup's Australian book business, the consequences for franchisees remains uncertain. Whilst the nine remaining Borders bookstores are set to close, no decision has yet been made on the future of Angus & Robertson (A&R).
This article was presented at the Canadian Law Conference of The International Council of Shopping Centers in April 2016.
There has been a lot written regarding a landlord’s options and remedies upon the default of a tenant under a commercial lease. This paper explores the considerations to be given specifically to third parties at the time of default and potential termination.
On March 3, 2012, the Ontario Superior Court of Justice released its decision in Dodd v. Prime Restaurants of Canada Inc. (2012 ONSC 1578). The decision acts as a caution to franchisors to ensure their franchisees are fully informed and properly advised prior to entering into settlement agreements. Without such steps, franchisors may find releases rendered ineffective against subsequent statutory claims by the application of section 11 of the Arthur Wishart Act (the Act).
Background
Summary
A recent Alberta appellate decision establishes that a trustee in bankruptcy may sell a franchise agreement to a third party, in spite of objections by the franchisor, under the Bankruptcy and Insolvency Act (BIA). The Alberta Court of Appeal’s decision in Ford Motor Company of Canada Ltd v Welcome Ford Sales Ltd contains three important messages for franchisors:
Introduction
A gasoline retailer defaults on its obligations under an ongoing Franchise Agreement that it has with a brand name in the oil & gas industry. What steps are available to the franchisor to protect its economic interests in that particular station or station(s)? How about if the franchisee/retailer files for bankruptcy protection? As the Energy Capital of the World, this issue is particularly relevant in Texas, home to thousands of retailers and dozens of the world’s top brands.
During the current economic downturn, a number of financially distressed franchisees either have filed or may file for bankruptcy protection to restructure their financial obligations. As a result, franchisors should familiarize themselves with some bankruptcy basics before they are confronted with the situation.
What Happens If One of Our Franchisees Declares Bankruptcy?
With the August 4, 2010 auction of the division leading Texas Rangers looming and the memory of last year's bankruptcy sale of the Phoenix Coyotes fresh in our minds, there has been a lot of discussion among bankruptcy professionals about the unique issues that arise when a sports club files for bankruptcy. Generally, sports clubs file bankruptcy for the same reasons as other businesses — as a last resort to save going concern value and/or to avail themselves of some strategic advantage under the Bankruptcy Code.