The Italian Oven, Inc.
Representation: Franchisees Committee
Bankruptcy – Western District of Pennsylvania
Situation: The Italian Oven, operator and franchisor of about 100 casual dining restaurants in several states, went public, garnering over $12,000,000 in new capital. Within a year, the capital was gone and the company unable to keep its head about water. Dozens of franchisees became concerned that their investment would be lost. A group of franchisees sought advice from Bernstein and Bernstein, P.C.
Action: It became immediately clear that the Company would be sold and, further, that the interests of the franchisees were different from those of the creditors. When the company filed a Chapter 11, application was made to the Court to appoint an Official Committee of Franchisees, in addition to the typical Committee of Unsecured Creditors. Bernstein and Bernstein, P.C., as counsel and the franchisees the began to negotiate with the Company and prospective purchasers to be certain the purchase was on terms favorable to the Franchisees.
Result: Within 120 days of the bankruptcy filing, the company was sold to an investor group who had agreed to make certain concessions to benefit the franchisees.