TSX-V Trading Symbol: FSN
RIDGELAND, MS, June 27, 2017 /CNW/ - FRANCHISE SERVICES
OF NORTH AMERICA INC. ("FSNA"
or the "Company") (FSN.V) today announced that in order to best
preserve the value of its assets for the benefit of creditors and
shareholders, it filed for Chapter 11 bankruptcy protection on
Monday, June 26, 2017, in the federal
bankruptcy court in the State of
Mississippi.
FSNA is the holding company for operating entities that own
several car rental brands whose associated independent operators
have more than 650 locations across the United States. The
Company anticipates that these subsidiaries will continue to
operate their businesses in the normal course during the pendency
of the Chapter 11 case. No layoffs are anticipated at FSNA or
any of its subsidiaries.
The Company's decision to seek bankruptcy protection was
necessitated by several factors, including liquidity issues
associated with expenses incurred in pending litigation by and
against its former financial advisor, Macquarie Capital
(USA), Inc., and two Macquarie
employees who also served as directors of the Company, as well as
other legacy claims against the Company. The Company's litigation
expenses relate to the Company's acquisition of Simply Wheelz LLC,
d/b/a Advantage Rent A Car, which was led by Macquarie and its
affiliates. The Company also remains impaired by potential claims
that arise from the Advantage acquisition.
The expenses and claims arising from the failed acquisition and,
in particular, those fees and expenses associated with these
actions pending with Macquarie and its associates in multiple
jurisdictions have severely impacted the Company's liquidity,
strained the Company's ability to operate, and necessitated that
the Company seek bankruptcy protection.
About FSNA
FSNA is a publicly traded company listed on the TSX Venture
Exchange. The Company and its subsidiaries own the following
brands: U-Save Car & Truck Rental® ("U-Save"), U-Save
Car Sales, Auto Rental Resource Center ("ARRC"), Xpress Rent
A Car, Sonoran National Insurance Group and Peakstone Financial
Services.
U-Save, together with its subsidiary ARRC, has over 650
locations throughout the United
States and is one of North
America's largest franchise car rental companies. U-Save
currently services 21 airport markets in 9 different states and 12
countries. Although primarily based in the United States, U-Save has 16 international
locations in Mexico, Greece, Central
America and the Caribbean.
With more than 150 years of combined insurance experience,
Sonoran National Insurance Group is licensed in all 50 states and
serves customers in every part of the country. Sonoran provides an
entire range of business and personal insurance solutions
customized to the needs of its clients.
Forward-Looking Information:
Certain statements made in this news release are
forward-looking in nature, including statements concerning
the ability of FSNA's subsidiaries to operate in the ordinary
course following an insolvency filing. The words "may", "could",
"should", "would", "expect", "intend", "estimate", "anticipate",
"believe", or "outlook" and similar expressions often identify
forward-looking information. By their nature, forward-looking
statements require FSNA to make assumptions and are subject to
inherent risks and uncertainties. The forward-looking statements
contained in this news release are based on certain key
expectations and assumptions made by FSNA, including with respect
to general economic, market and industry conditions. Although FSNA
believes that the expectations and assumptions on which the
forward-looking statements are based are reasonable, undue reliance
should not be placed on the forward-looking statements because FSNA
can give no assurance that they will prove to be correct. These
forward-looking statements also involve known and unknown risks,
uncertainties and other factors that may cause the actual results,
performance or achievements of FSNA to differ materially from the
anticipated results, performance or achievements or developments
expressed or implied by such forward-looking statements. If any
such risks actually occur, they could materially and adversely
affect FSNA's business, financial condition or results of
operations. FSNA's forward-looking statements are qualified in
their entirety by these cautionary statements. In addition, the
forward-looking statements are made only as of the date of this
news release, and except as required by applicable securities law,
FSNA undertakes no obligation to publicly update these
forward-looking statements to reflect new information, subsequent
events or otherwise.
Neither TSX Venture Exchange nor its
Regulation Services Provider (as that term is defined in the
policies of the TSX Venture Exchange) accepts responsibility for
the adequacy or accuracy of this release.
SOURCE Franchise Services of North America Inc.