Franchise Services gives update on bankruptcy proceedings

advantage-rent-a-car-franchise-opportunitiesRIDGELAND — Franchise Services of North America Inc. has issued an update on the previously announced proposed sale of certain assets used in connection with the business of the company’s wholly-owned subsidiary, Simply Wheelz, LLC, which does business as Advantage Rent A Car.

The Catalyst Capital Group Inc., on behalf of one or more funds managed by it, was selected as the prevailing purchaser in an auction of the Advantage assets conducted in accordance with bidding procedures approved by the United States Bankruptcy Court for the Southern District of Mississippi in the Simply Wheelz insolvency proceedings.  Catalyst had previously been approved by the Court as a secured lender in the proceedings.

Catalyst has confirmed that it will assume 41 United States airport concession agreements used in the Advantage business from Simply Wheelz and Franchise Services pursuant to an asset purchase agreement entered into among Catalyst, Advantage and Franchise Services and approved by the Court. Catalyst will also assume certain leases, executory contracts, personal property and intellectual property used in connection with the Advantage business.

Pursuant to the terms of the asset purchase agreement approved by the Court, the consideration for the Catalyst Asset Sale will be a credit bid of $46 million against the debtor-in-possession credit facility provided by Catalyst to Simply Wheelz, plus the assumption of certain liabilities of the Advantage business by Catalyst asociated with such concession agreements. No finder’s fee will be paid in connection with the Catalyst Asset Sale. The Catalyst Asset Sale is currently scheduled to close on or around tomorrow.

Franchise Services further announces that, in accordance with bidding procedures approved by the Court, Avis Budget Car Rental, LLC and The Hertz Corporation have been selected as successful bidders for 22 United States airport concession agreements used in the Advantage business and not included in the Catalyst Asset Sale.

Pursuant to binding term sheets agreed to by the respective parties and approved by the Court: (i) Avis will assume 12 United States airport concession agreements (together with related leases and executory contracts) for consideration of approximately $6 million in cash, plus the assumption of certain liabilities of the Advantage business associated with such concessions; and (ii) Hertz will assume 10 United States airport concession agreements (together with related leases and executory contracts) for consideration of approximately $200,000 in cash, plus the assumption of certain liabilities of the Advantage business associated with such concessions by Hertz and the continued right of Advantage and Catalyst to use Hertz’s vehicle fleet for April, May and June, which the parties agreed has a value of approximately $3.5 million.

The Avis Asset Sale and the Hertz Asset Sale are currently expected to be completed in the second quarter of 2014. However, Franchise Services cautions that there are a number of procedural matters and arrangements with third parties that will need to be completed before such sales are likely to be consummated.

No finder’s fee will be paid in connection with the Catalyst Asset Sale, the Avis Asset Sale or the Hertz Asset Sale.  The Catalyst Asset Sale, the Avis Asset Sale and the Hertz Asset Sale together constistute a sale of substantially all of the assets of Simply Wheelz.

Simply Wheelz filed for bankruptcy protection under the United States Bankruptcy Code on Nov. 5, 2013.

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3 Responses to “Franchise Services gives update on bankruptcy proceedings”

  1. Franchise Services gives update on bankruptcy proceedings | Black in Mississippi Says:

    […] MBJ Staff RIDGELAND — Franchise Services of North America Inc. has issued an update on the previously […]

  2. Lastest Business Services News - WebMarkISP.com Says:

    […] Franchise Services gives update on bankruptcy proceedings advantage-rent-a-car-franchise-opportunities RIDGELAND — Franchise Services of North America Inc. has issued an update on the previously announced proposed sale of certain assets used in connection with the business of the company's wholly-owned … Read more on Mississippi Business Journal (blog) […]

  3. David Englad Says:

    Has the MS Business Journal investigated how FSNA’s CEO, Tom McDonnell, has singlehandedly destroyed FSNA and cost MS hundreds of jobs in the process? McDonnell and FSNA are being sued, are in arbitration, or are defending EEOC claims by numerous former employees thanks to McDonnell’s fraudulent, irresponsible and frankly terrible business judgment. McDonnell did not preside of FSNA and Advantage Rent a Car before his lack of managerial skill forced Advantage into Chapter 11 bankruptcy. A stock once valued as high as $0.95 now trades at $0.07 and is subject to a cease trade order. Furthermore, FSNA, still a public company, has not filed a financial statement since 30 June 2013. The Journal should force McDonnell to explain how one man can destroy so many companies and the lives of so many employees in such a short period of time.

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