Rick Schaden founded Quiznos and then ran it into the ground, clearing the way for Avenue Capital Group and Fortress Investment Group to snap it up two years ago. So he thinks it’s pretty ungrateful for them to turn around and sue him, especially after they allegedly agreed not to.
Former owner/CEO Richard ‘Rick’ Schaden and his management team filed their objection in bankruptcy court, stating that Avenue Capital Group and Fortress Investments, first-lien lenders that took over the troubled chain in January 2012, had no right to sue their group on claims of fraud and breach of fiduciary duty. While the hedge fund companies allege the former Quiznos executives had deceptively lured investors during that first restructuring, the former executives claim Avenue and Fortress had cleared them of any future liability as part of the deal….
The article further states that the executives are asking the bankruptcy judge to reject the Chapter 11 bankruptcy plan, which swaps $444 million in senior debt for $200 million in new debt and a majority stake in the restructured Quiznos. The Schaden team argued that it was absurd that each of these former managers, as well as every other officer, director, agent and employee who worked for Quiznos before January 2012, conspired against these “two enormous hedge funds who hold themselves out as extremely sophisticated investors,” and that Avenue and Fortress relied solely on these “faulty projections” rather than the advice of their lawyers and financial advisors.