Tag Archives: Maria G. Carr

ILN Today Post

What a wreck: Attempted rejection of implied franchise leads to dismissal of bankruptcy cases

This spring, the United States Bankruptcy Court for the District of Delaware found that the bankruptcy case of Rent-a-Wreck, the car rental business, could be dismissed for bad faith because of its long and ongoing dispute with one of its franchisees. (See In re Rent-A-Wreck of America, Inc., 2018 BL 48230 (Bankr. D. Del. 17-11492)) The case serves as a cautionary tale for franchisors that are in some type of financial distress due to particularly contentious disputes with their franchisees; bankruptcy cannot be used as a tool to simply discard a particularly problematic franchisee.

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