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Sued by the Franchise Group Litigation Trustee in Delaware: Deadlines, Service and Next Steps

Franchise Group Litigation Trust preference lawsuit Delaware

Quick Answer

If your company received a complaint captioned Lawrence R. Hirsh, solely in his capacity as Litigation Trustee of the Franchise Group Litigation Trust v. [your company], you have been sued in the U.S. Bankruptcy Court for the District of Delaware in Wilmington. Your answer is generally due 30 days after the summons was issued. The “summons served due date” shown on the court docket, in late January or early February 2027, is the plaintiff’s deadline to serve you. It is not your deadline to answer.

Sued in the Franchise Group bankruptcy? Call (302) 214-0777 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.

The Case Behind the Complaint

The lawsuits arise from In re Franchise Group, Inc., Case No. 24-12480 (LSS), the Chapter 11 case of the former owner of The Vitamin Shoppe, Pet Supplies Plus, Buddy’s Home Furnishings and American Freight. Franchise Group filed in Wilmington on November 3, 2024, and its plan took effect on June 6, 2025. The plan created the Franchise Group Litigation Trust, and Lawrence R. Hirsh was appointed Litigation Trustee to pursue claims such as preference actions.

All of the cases are assigned to Judge Laurie Selber Silverstein. The trustee’s counsel in most cases is Raines Feldman Littrell LLP, whose Wilmington office is on North Market Street, a short distance from the Bankruptcy Court.

Why the Lawsuits Came Now

Under 11 U.S.C. § 546(a), preference lawsuits generally must be filed within two years after the bankruptcy filing. Franchise Group filed on November 3, 2024, so the trustee filed this wave between October 23 and November 2, 2026, just before that deadline. Many recipients received a demand letter months earlier; at least one complaint says demand letters were sent around May 12, 2026.
– 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.

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.

Reading Your Papers

Document What it tells you
Summons Your adversary number and the date the summons was issued, which starts your 30-day clock
Complaint The claims against you, usually preference (§ 547), recovery (§ 550) and claim disallowance (§ 502(d) and (j)); some add fraudulent transfer (§ 548)
Exhibit A Each payment, its date, and the amount, plus the trustee’s “New Value Credit”
Footnote 1 of the complaint Where to find the Debtors’ list of entities, through the claims agent, Kroll

Check which Franchise Group entity is named as the payor. Many complaints focus on payments by American Freight, which was shut down during the bankruptcy.

Your Response Options

  1. Ask for an extension. Plaintiff’s counsel often agrees if asked before the deadline.
  2. Send a defense package. Payment history, contracts and service or shipping records can support defenses the trustee did not credit.
  3. File an answer. In Delaware, the answer must also state whether you consent to the bankruptcy court entering final orders, under Local Rule 7008-1.
  4. File a motion. A complaint can be challenged for pleading defects or improper service.
  5. Most preference cases resolve without trial.

Doing nothing is the one option to avoid. The trustee can seek a default judgment for the full amount, plus interest and costs.

The Trustee’s “New Value Credit” Is Not the Whole Story

Each complaint says the trustee reviewed the Debtors’ books and subtracted a “New Value Credit” before setting the demand. That number comes from the Debtors’ records, not yours, and in at least one complaint it was $0.00. It also addresses only one defense. Ordinary course of business, contemporaneous exchange and other defenses are not credited in the demand and must be raised by the vendor.

Why Local Delaware Counsel Matters

A company must appear through a lawyer. Under Delaware Bankruptcy Local Rule 9010-1, a lawyer who is not admitted in Delaware must associate with Delaware counsel. Our Wilmington office at 1213 N. King Street appears directly in these cases, without a second firm.

Frequently Asked Questions

Who is Lawrence R. Hirsh?
He is the Litigation Trustee of the Franchise Group Litigation Trust, appointed under Franchise Group’s confirmed plan to pursue claims, including preference lawsuits, for the benefit of creditors.

What is the “summons served due date” on the docket?
It is the plaintiff’s deadline to serve the summons and complaint. Your answer deadline is generally 30 days after the summons was issued.

Which judge is handling the Franchise Group lawsuits?
Judge Laurie Selber Silverstein of the U.S. Bankruptcy Court for the District of Delaware.

Do I need a Delaware lawyer?
A company must be represented by a lawyer admitted in Delaware or working with Delaware counsel.

Will the case go to trial?
Most preference cases resolve before trial, but a vendor must respond on time to protect its defenses.

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

  1. Send us your summons, complaint and Exhibit A, or simply call and we will tell you what to send.
  2. We confirm your deadline and, if needed, contact plaintiff’s counsel about an extension so you are protected.
  3. 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 (302) 214-0777.

Speak With a Delaware Bankruptcy Attorney

Kasen Law Group has resolved 79 preference and fraudulent transfer matters with an average claim reduction of 92.4%. Jenny R. Kasen previously served as a judicial law clerk to former Chief Judges of the U.S. Bankruptcy Courts for the District of Delaware and the District of New Jersey.

Call (302) 214-0777 for a free consultation. Our office is at 1213 N. King Street, Suite 2, Wilmington, DE 19801. Learn more about our preference litigation and fraudulent transfer litigation practice.

Delaware Bankruptcy Attorney is a trade name of Kasen Law Group, P.C. This article is general information 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 Local Rules.

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