Franchise Group’s Unsecured Creditors Seek to Fight Lender Liens

Franchise Group Inc.'s unsecured creditors asked for authority to file a lawsuit challenging the perfection of liens on certain of the company’s assets securing more than $125 million worth of pre-bankruptcy loan debt.

Franchise Group, the bankrupt owner of brands like the Vitamin Shoppe and Pet Supplies Plus, has stipulated that the group of lenders led by Alter Domus (US) LLC have perfected interests in real estate, cash accounts, insurance policies and other assets. But the official committee of unsecured creditors in the company’s Chapter 11 case said it has found no evidence that second lien lenders “have a valid, ...