Receiver appointed to local 'franchise' case

By Sheila Pursglove
Legal News

Attorney Frank Simon, managing partner of Simon PLC, in Bloomfield Hills, and leader of its Financial Institution/Litigation team, is a litigator, a workout attorney, and the "go-to" receiver for many of the Michigan courts. Simon has made receivership a large part of the firm's practice in the past 10 years by recruiting a team of professionals who handle all aspects of receiverships.

A recent case was among the most unusual he has handled.

Mariann Elizabeth Mladenoff was the sole shareholder of a Tim Hortons Café & Bake Shop franchise in Macomb County, operating since July 2004. The business employed approximately 22 people.

When Mladenoff died of a stroke on June 28, the New Baltimore resident did not have an executor, administrator or personal representative who could either return the business to Tim Hortons USA or transfer the business to a third party approved by the firm.

To complicate matters, Mladenoff's only surviving next of kin is her husband who is not able to take over the business.

The employees continued to operate the business, but the parent organization had no effective means to enforce the original franchise agreement and oversee this business since these employees were not parties or guarantors of the agreement.

A preliminary injunction and motion for appointment of a receiver was heard in August by a Macomb County Circuit Court judge who determined that Simon would be a great choice for a receiver.

Simon, who has acted as a receiver for more than 90 properties, has been appointed receiver to protect THUSA's interest and to facilitate a transfer or sale.

"The case is unusual because it involves a national brand whose corporate wants to maintain high quality," notes Simon. "We've had similar franchisees involving hotel brands such as Marriott."

Utilizing a receiver pays immediate benefits for Tim Hortons USA, he adds.

"It will keep the brand maintained since we located a Tim Hortons franchisee willing to operate and manage the facility until a new buyer is found. There also were issues with unpaid taxes that we are able to resolve.

"We were able to retain employees under the receivership, rather than fire people. We're also able to immediately make improvements to the facility and keep operations going, rather than shut down the location."

Published: Wed, Oct 14, 2015

Subscribe to the Legal News!
Full access to public notices, articles, columns, archives, statistics, calendar and more
Day Pass Only $4.95!
One-County $80/year
Three-County & Full Pass also available