Creditors Target Bryant Riley, Brian Kahn Over Collapse of FRG

A litigation trust that bankrupt Franchise Group Inc.has agreed to set up will target the controversial former chief executive of the brand manager as well as Bryant Riley, the co-founder of investment firm B. Riley Financial Inc., according to people familiar with the proposal.

Three main creditor groups would split any money won from lawsuits or settlements related to the troubled $2.8 billion buyout lead by former CEO Brian Kahn and backed by B. Riley, said the people, who asked not to be named discussing private plans.

The litigation trust will file lawsuits in order to raise ...