Quick Answer
Lawrence R. Hirsh, as Litigation Trustee of the Franchise Group Litigation Trust, filed dozens of preference lawsuits in the U.S. Bankruptcy Court for the District of Delaware between October 23 and November 2, 2026. The lawsuits seek to recover payments that Franchise Group, Inc. and its affiliates, including American Freight, made to vendors between August 5, 2024 and November 3, 2024. A sued company generally must respond through a lawyer within 30 days after the summons was issued. The amount demanded is usually not what a vendor ends up paying, because the law gives vendors defenses that can reduce or eliminate the claim.
Sued in the Franchise Group bankruptcy? Call (888) 959-8220 today. Complaints were filed between October 23 and November 2, 2026, so many answers may be due as early as late November 2026. We offer a free, no-obligation consultation and can confirm your exact deadline the same day.
Franchise Group Preference Lawsuits at a Glance
| Question | Answer |
| Bankruptcy case | In re Franchise Group, Inc., et al., Case No. 24-12480 (LSS), jointly administered |
| Court | U.S. Bankruptcy Court for the District of Delaware, Wilmington |
| Judge | Hon. Laurie Selber Silverstein |
| Bankruptcy filed | November 3, 2024 (Chapter 11) |
| Preference period | August 5, 2024 – November 3, 2024 |
| Plan confirmed / effective | June 2, 2025 / June 6, 2025 |
| Who is suing | Lawrence R. Hirsh, Litigation Trustee of the Franchise Group Litigation Trust |
| Plaintiff’s lawyers | Raines Feldman Littrell LLP (for most complaints) |
| Demand letters | Sent around May 12, 2026, according to at least one complaint |
| Lawsuits filed | October 23 – November 2, 2026; about 50 on the docket |
| Answer deadline | Generally 30 days after the summons was issued |
| Who is being sued | Vendors, service providers and professional firms |
What Happened to Franchise Group
Franchise Group, Inc., based in Boca Raton, Florida, owned retail brands including The Vitamin Shoppe, Pet Supplies Plus, Buddy’s Home Furnishings and American Freight. It filed Chapter 11 in Delaware on November 3, 2024, with nearly $2 billion in debt, under a restructuring deal in which its senior lenders exchanged debt for ownership of the reorganized company.
As part of the bankruptcy, Franchise Group shut down American Freight, its discount furniture and appliance chain, and closed all of its stores. The plan was confirmed on June 2, 2025 and took effect on June 6, 2025. It created the Franchise Group Litigation Trust and appointed Lawrence R. Hirsh as Litigation Trustee, with authority to pursue avoidance claims, including preference claims, for the benefit of creditors.
What a Franchise Group Preference Lawsuit Seeks
A preference lawsuit asks a vendor to return payments it received in the 90 days before the bankruptcy. Each Franchise Group complaint is a separate adversary proceeding filed inside Case No. 24-12480 and typically seeks to:
- Avoid the payments as preferences under 11 U.S.C. § 547(b).
- Recover them from the vendor under § 550.
- Disallow the vendor’s own claims against the Debtors under § 502(d) and (j) until it pays.
A few complaints also include fraudulent transfer claims under § 548. Each complaint attaches an Exhibit A listing the payments and identifies which Franchise Group entity made them, such as American Freight.
A vendor does not have to have done anything wrong to be sued. These claims are based on the timing of payments, not misconduct.
Who Is Being Sued
The defendants are a broad mix of businesses that Franchise Group or its affiliates paid in the months before the bankruptcy, including:
- Furniture, appliance and consumer products suppliers
- Technology, software, data and e-commerce providers
- Marketing and advertising agencies
- Insurance, employee benefits and claims administrators
- Supply chain, telecommunications and facilities vendors
- Law firms, investment banks, accountants and financial advisors
- Local taxing authorities
- Investment entities and individuals named in fraudulent transfer suits
Is Your Company Named?
See the full list of Franchise Group preference defendants, with adversary numbers, to check for your company’s legal name, trade name or affiliate. If you find your name, call us before you respond or pay.
The Deadline to Respond
The answer is generally due 30 days after the Delaware court issued the summons, not 30 days after the papers arrived. With complaints filed between October 23 and November 2, 2026, many answer deadlines will fall in late November and December 2026.
A company must respond through a lawyer admitted in Delaware or working with Delaware counsel. A letter from an owner or finance manager to the court is not a response.
How Vendors Defend Franchise Group Preference Claims
The complaints state that the trustee reviewed the Debtors’ records and subtracted what he calls a “New Value Credit” before setting the demand. That credit reflects the plaintiff’s own view of one defense. It does not account for every defense the vendor may have. The main defenses are:
- Subsequent new value. Credit for goods or services provided after a payment and not paid for.
- Ordinary course of business. Protection for payments made on normal terms between the parties or in the industry.
- Contemporaneous exchange. Protection for prepaid or same-time transactions.
- Payments not made with the debtor’s property. Payments by a third party may fall outside the statute.
Which defenses apply, and how much they are worth, depends on each vendor’s records and is best evaluated by counsel.
What to Do Now
- Find the summons and note its issue date and your adversary number, which begins with 26-50 or 26-51.
- Check Exhibit A to see which Franchise Group entity made the payments.
- Send the summons, complaint and Exhibit A to a Delaware-admitted bankruptcy attorney right away.
- Preserve invoices, contracts, payment records, shipping or service records and communications from mid-2024 through November 2024.
- Do not pay the demand or sign anything until your defenses have been reviewed.
Why Vendors Choose Kasen Law Group
- Proven results. We have resolved 79 preference and fraudulent transfer matters, reducing $13,968,865.93 in total claims to $1,055,323.52, an average claim reduction of 92.4%.
- Retail bankruptcy experience. Our matters include preference cases arising from retail bankruptcies such as Rite Aid, Bed Bath & Beyond and J&M Sales.
- Delaware admission. Jenny R. Kasen is admitted in the U.S. Bankruptcy Court for the District of Delaware and previously clerked for former Chief Judges of the Delaware and New Jersey bankruptcy courts.
- More than 15 years in bankruptcy law. Jenny R. Kasen is Board Certified in Consumer Bankruptcy Law by the American Board of Certification and a multiple-time New Jersey Super Lawyers Rising Star.
Frequently Asked Questions
Who is suing Franchise Group vendors?
Lawrence R. Hirsh, solely as Litigation Trustee of the Franchise Group Litigation Trust, represented in most cases by Raines Feldman Littrell LLP.
What is the Franchise Group bankruptcy case number?
In re Franchise Group, Inc., et al., Case No. 24-12480 (LSS), in the U.S. Bankruptcy Court for the District of Delaware.
Which payments are at risk?
Payments made by Franchise Group or its debtor affiliates between August 5, 2024 and November 3, 2024.
I was paid by American Freight, not Franchise Group. Does this apply to me?
Yes. American Freight was one of the debtors, and many complaints seek payments made by American Freight specifically.
How long do I have to respond?
Generally 30 days after the summons was issued, not after it was received.
Do I have to pay the full amount demanded?
Usually not. The trustee’s new value credit is only one defense, and others, such as ordinary course, may reduce the claim further.
Our Results: 79 Preference and Fraudulent Transfer Matters Settled
These are actual preference and fraudulent transfer claims we have resolved for defendants. On average, our clients paid 7.6 cents for every dollar demanded.
| Summary | |
| Matters settled | 79 |
| Total claims asserted | $13,968,865.93 |
| Total settlements paid | $1,055,323.52 |
| Total saved for clients | $12,913,542.41 |
| Average settlement paid per dollar demanded | 7.6% |
| Average claim reduction | 92.4% |
Details of Settled Matters
| Claim Amount | Settled For | Percentage | Bankruptcy Case | Industry |
| $2,728,910.00 | $8,000.00 | <1% | Purekana, LLC | Retail |
| $1,702,988.87 | $1,000.00 | <1% | Rite Aid Corporation | Retail |
| $1,018,925.76 | $5,000.00 | <1% | Bed Bath & Beyond, Inc. | Retail |
| $678,363.68 | $28,000.00 | 4% | Bed Bath & Beyond, Inc. | Retail |
| $440,690.49 | $53,000.00 | 12% | Rite Aid Corporation | Retail |
| $374,905.00 | $7,500.00 | 2% | Rite Aid Corporation | Retail |
| $362,952.00 | $3,000.00 | <1% | Virgin Orbit, LLC | Aerospace |
| $337,955.09 | $2,500.00 | <1% | Yellow Corporation | Transportation |
| $327,217.63 | $40,000.00 | 12% | Deb Stores Holding LLC | Retail |
| $295,887.08 | $37,000.00 | 13% | NSC Wholesale Holdings, LLC | Retail |
| $292,633.33 | $51,979.00 | 18% | AB Technologies LLC | Tech |
| $263,391.72 | $130,000.00 | 49% | Bed Bath & Beyond, Inc. | Retail |
| $248,766.84 | $10,000.00 | 4% | Deb Stores Holding LLC | Retail |
| $247,673.19 | $40,000.00 | 16% | Hollister Construction Services, LLC | Construction |
| $230,000.00 | $6,000.00 | 3% | Bed Bath & Beyond, Inc. | Retail |
| $220,312.50 | $90,000.00 | 41% | Mallinckrodt PLC | Pharmaceutical |
| $216,588.19 | $20,000.00 | 9% | Medley Health, Inc. et al. | Healthcare |
| $212,159.37 | $1,500.00 | <1% | Rite Aid Corporation | Retail |
| $206,718.28 | $10,000.00 | 5% | Tritek International Inc. | Food |
| $187,704.38 | $15,000.00 | 8% | Rite Aid Corporation | Retail |
| $181,349.11 | $28,000.00 | 15% | Rite Aid Corporation | Retail |
| $163,198.61 | $77,500.00 | 47% | Pipeline Foods, LLC | Agriculture |
| $159,073.89 | $11,000.00 | 7% | Mitchell Gold Co. | Retail |
| $149,371.05 | $2,500.00 | 2% | Williamston Hospital Corporation | Healthcare |
| $126,788.36 | $2,700.00 | 2% | J&M Sales, Inc. | Retail |
| $121,313.87 | $5,000.00 | 4% | Hollister Construction Services, LLC | Construction |
| $116,955.00 | $30,000.00 | 26% | J&M Sales, Inc. | Retail |
| $116,696.21 | $20,000.00 | 17% | JC USA, Inc. | Retail |
| $112,930.65 | $2,500.00 | 2% | Rite Aid Corporation | Retail |
| $112,806.39 | $13,000.00 | 12% | Rite Aid Corporation | Retail |
| $106,907.97 | $3,000.00 | 3% | Taronis Fuels, Inc. | Fuel |
| $105,063.48 | $6,000.00 | 6% | The Mitchell Gold Co., LLC | Retail |
| $95,578.12 | $17,000.00 | 18% | Charming Charlie, LLC | Retail |
| $90,768.30 | $5,000.00 | 6% | Hollister Construction Services, LLC | Construction |
| $87,381.00 | $22,500.00 | 26% | AB Technologies LLC | Tech |
| $85,149.74 | $1,500.00 | 2% | Taronis Fuels, Inc. | Fuel |
| $74,724.89 | $13,000.00 | 17% | Rite Aid Corporation | Retail |
| $64,040.58 | $2,000.00 | 3% | New England Motor Freight, Inc. | Trucking |
| $61,796.34 | $6,000.00 | 10% | AB Technologies LLC | Tech |
| $59,562.90 | $7,500.00 | 13% | ProAir Holdo, LLC | HVAC |
| $59,072.53 | $25,000.00 | 42% | Bed Bath & Beyond, Inc. | Retail |
| $56,607.93 | $26,000.00 | 46% | Direct Buy/Z Gallerie | Retail |
| $52,701.19 | $20,000.00 | 38% | Kline Construction Co. | Construction |
| $49,176.99 | $1,600.00 | 3% | Yellow Corporation | Transportation |
| $47,690.00 | $1,800.00 | 4% | Rite Aid Corporation | Retail |
| $44,324.00 | $3,500.00 | 8% | Samuels Jewelers, Inc. | Retail |
| $44,230.16 | $3,000.00 | 7% | CalPlant I, LLC | Construction |
| $40,477.04 | $1,500.00 | 4% | Erus Builders, Inc. | Construction |
| $40,368.07 | $1,000.00 | 2% | Rite Aid Corporation | Retail |
| $39,015.00 | $5,000.00 | 13% | Hollister Construction Services, LLC | Construction |
| $38,827.66 | $3,000.00 | 8% | Immune Pharmaceuticals, Inc. | Pharmaceutical |
| $34,467.70 | $2,000.00 | 6% | Hygea Health Holdings Inc. | Healthcare |
| $34,271.12 | $2,000.00 | 6% | Clio Holdings, LLC | Stone |
| $33,732.54 | $7,500.00 | 22% | Exide Holdings, Inc. | Battery |
| $32,284.50 | $2,000.00 | 6% | Kranos Corporation | Retail |
| $31,690.00 | $3,000.00 | 9% | Clio Holdings, LLC | Stone |
| $31,318.83 | $7,500.00 | 24% | Port Neches Fuels, LLC | Construction |
| $30,109.87 | $6,500.00 | 22% | Hygea Health Holdings, LLC | Healthcare |
| $29,310.80 | $14,655.40 | 50% | J&M Sales, Inc. | Retail |
| $28,676.69 | $7,000.00 | 24% | Pipeline Foods, LLC | Agriculture |
| $27,525.58 | $4,000.00 | 15% | Art Supply Enterprises, Inc. | Retail |
| $27,314.77 | $3,000.00 | 11% | DirectBuy Home Improvement, Inc. | Retail |
| $27,069.90 | $4,000.00 | 15% | Beef International, Inc. | Food |
| $26,258.68 | $1,000.00 | 4% | DirectBuy Home Improvement, Inc. | Retail |
| $26,152.17 | $4,000.00 | 15% | CalPlant I, LLC | Manufacturing |
| $23,111.40 | $10,000.00 | 43% | Williams Industrial Services Group, Inc. | Construction |
| $22,679.50 | $1,000.00 | 4% | DirectBuy Home Improvement, Inc. | Retail |
| $22,150.24 | $11,075.12 | 50% | J&M Sales, Inc. | Retail |
| $21,828.00 | $10,914.00 | 50% | J&M Sales, Inc. | Retail |
| $21,698.87 | $6,500.00 | 30% | NSC Wholesale Holdings, LLC | Retail |
| $21,651.49 | $5,000.00 | 23% | True Religion Apparel, Inc. | Retail |
| $18,909.75 | $2,000.00 | 11% | DirectBuy Home Improvement, Inc. | Retail |
| $17,320.88 | $3,500.00 | 20% | BSI Operating, LLC | Oil and Gas |
| $16,160.00 | $1,500.00 | 9% | Patriot National, Inc. | Insurance |
| $14,800.62 | $1,600.00 | 11% | Hygea Health Holdings, LLC | Healthcare |
| $14,094.80 | $2,000.00 | 14% | Patriot National, Inc. | Insurance |
| $13,667.70 | $3,000.00 | 22% | Beef International, Inc. | Food |
| $12,919.10 | $1,500.00 | 12% | DTech Liquidating, Inc. | Healthcare |
| $9,000.00 | $1,000.00 | 11% | CalPlant I, LLC | Manufacturing |
Prior results do not guarantee a similar outcome. Every case depends on its own facts.
What Happens When You Call
- Send us your summons, complaint and Exhibit A, or simply call and we will tell you what to send.
- We confirm your deadline and, if needed, contact plaintiff’s counsel about an extension so you are protected.
- We review your defenses and give you a clear plan and a realistic view of the outcome before you commit to anything.
The consultation is free and there is no obligation. Call (888) 959-8220.
Talk to Kasen Law Group About Your Franchise Group Preference Lawsuit
If your company received a demand letter or complaint from the Franchise Group Litigation Trust, contact us before you respond or pay. We will confirm your deadline, review your Exhibit A and tell you what a realistic outcome looks like.
Call (888) 959-8220 for a free consultation, or contact us online. Learn more about our bankruptcy litigation practice and our representative matters.
This article is general information about bankruptcy law and is not legal advice. Prior results do not guarantee a similar outcome. Deadlines in a specific adversary proceeding are governed by the summons, any court order and the applicable rules. Jenny R. Kasen is admitted to practice before the United States Bankruptcy Courts for the District of Delaware, the District of New Jersey, the Eastern District of Pennsylvania, and the Southern District of Florida.