Manis Law Inc.’s Post

“No matter where they are organized or what industry they operate in, officers and directors of companies have certain fiduciary duties to the companies they manage and oversee. Among those is a duty of loyalty, which requires officers and directors to put the company’s interests before their own when making decisions on behalf of the company. Breaches of the duty of loyalty can take many forms – usurping a corporate opportunity for your own benefit, using private corporate information for personal gain, and taking a personal interest in transactions between the company and another party. The last one is among the issues being investigated in Red Lobster’s recent bankruptcy filing as the company alleges its former Interim CEO, Paul Kenny, made decisions on behalf of Red Lobster that ultimately benefited a breaded shrimp supplier (at which supplier’s request, Kenny was installed in his position as Interim CEO), to the detriment of Red Lobster. If the allegations are well founded, Kenny, and any other director or officer who participated or assisted in the breach of Kenny’s duties, could be personally liable for all of the financial damages resulting from his actions.” Said BAST AMRON LLP partner Dana Quick regarding a recent article published by Law360. https://lnkd.in/gk_aMCJd #insolvencylitigators #insolvencyandbankruptcy #insolvencyandrestructuring #Bankrutpcyinsights  

"With this sudden surge in filings, many are left wondering: Why now, and why so many all at once?" In a recent expert analysis for Law360, DGIM Partner Isaac Marcushamer delves into the surge of restaurant bankruptcies, shedding light on the underlying causes behind this growing trend. To read the full article, click below: https://lnkd.in/dH6yxyre

The demise of Red Lobster is a perfect case study in how to kill a business https://buff.ly/3UoLqDj

On the heels of Red Lobster's news and the unexpected closing of Foxtrot/Dom's Kitchen ($180M in debt), there are definitely waves of uncertainty in the seafood and food sector. In fact, unexpected bankruptcies are happening across many sectors (construction, transportation, tech and retail to name a few) and the reality is that most companies are still hoping their bad debt reserve will be enough to cover the loss (more often than not, it isn't). For an investment of a smaller percentage of your A/R, you can secure a policy that will have a maximum liability which multiplies your protection by at least 20 times your allowance for doubtful accounts. Let's talk about a better allocation of your capital and how Allianz Trade will help you weather the economic storm. Michael.farrell@amer.allianz-trade.com or (647) 521-9836 #smarterbusiness #protectyourasset #AllianzTrade

ASIC released its insolvencies results for the last financial year recently and confirmed what you might have known - the construction industry followed by food and accommodation were the two hardest hit industries. Sadly a popular Adelaide pizza chain has just quietly folded. I wonder if anyone is providing outplacement support to all the employees directly impacted by insolvencies in Adelaide. If you are an insolvency practitioner - do let me know if any help is provided to employees in this situation. I'd hate to think they have no support to find their next role. #insolvency #redundancy #insolvencies #insolvencysupport #redundancies #lostjob

The demise of Red Lobster is a perfect case study in how to kill a business https://lnkd.in/gMGAWaFy

Knowledge of both the law and your client cannot be underestimated. Too often seemingly small matters are given to people who are less senior and don't possess the right knowledge and don't have the experience or confidence to ask questions. However, when an error is discovered, it is better to be open and talk to the regulator, including how steps have been taken to ensure it won't happen again. https://lnkd.in/gP9gDUuF

The #bakery industry is abuzz with news of a high-stakes legal battle. GrupoBimbo, the world's largest bakery company, has filed a CAD $2 billion counterclaim against Maple Leaf Foods Inc, alleging misrepresentation during the 2014 sale of Canada Bread Company, Limited. The #lawsuit centres on allegations of fraudulent and negligent misrepresentation tied to a bread price-fixing scandal. With billions at stake and reputations on the line, this #legal showdown is poised to redefine dynamics in the #Canadian food industry. https://lnkd.in/e77_kgy8

Red Lobster's Bankruptcy: A Tale of High Costs and Strategic Missteps I grew up in Kansas where our idea of seafood was catfish and maybe an occasional crawdad, so I will never forget the first time I ate at Red Lobster and was exposed to the rest of the ocean's bounty. I know I tried lobster, but all I really remember about the meal were the biscuits. Come to think of it, that may have been the only time I ate at Red Lobster. I'm not much of a seafood person. Nevertheless, I was a little saddened to hear that Red Lobster filed for Chapter 11 bankruptcy protection. https://lnkd.in/gwU_thPg The Orlando-based company, burdened by onerous leases, escalating labor costs, and a costly unlimited shrimp promotion, listed assets and liabilities between $1 billion to $10 billion. The chain has seen a decline of around 30% in diners since 2019. While there were signs of recovery post-pandemic, sales sharply declined in the last year, resulting in a $76 million loss for the 2023 fiscal year. Inflationary pressures and higher labor costs further strained the company’s finances, with many leases priced above market rates. Red Lobster's decision to change its $20 "Ultimate Endless Shrimp" from a limited-time offer to a permanent promotion cost the company $11 million. This strategic misstep, coupled with an investigation into the shrimp deal and potential overreach by its owner, Thai Union Group Plc, exacerbated financial troubles. Thai Union and Red Lobster had sought an out-of-court deal to transfer 80% of the company to creditors, but negotiations fell through. Fortress Investment Group, leading the lenders, has agreed to provide $100 million in financing to support Red Lobster through bankruptcy, setting a floor price for the company’s assets in a stalking horse bid. As Red Lobster navigates its restructuring, brands across industries can glean valuable lessons from this situation. Balancing attractive promotions with financial sustainability, managing operational costs, and maintaining strategic flexibility are crucial for enduring success. The importance of understanding market conditions, increased competition, and changing consumer behaviors cannot be overstated. In today's fast-paced market, brands must remain agile, continually adapting their strategies to stay relevant and meet evolving customer needs. At Havas Edge, we understand the complex dynamics of consumer behavior and the importance of adapting strategies to meet changing market conditions. Our expertise in delivering value messages to the right audience can help brands navigate these turbulent times. Whether it's through targeted advertising, or insightful market analysis, we are here to support your brand's growth and resilience. To learn more about how we can assist your brand, contact Allie Wiggins. #RedLobster #StrategicManagement #ConsumerBehavior

Stradling partners Marc Schneider and Stephen Ram, along with Andrew Mason and Michael Mosher, secured a recent win in a stock drop securities class action. On December 12, 2024, the district court granted Stradling’s motion to dismiss on behalf of the former CFO of Tattooed Chef, a plant-based food company. Plaintiffs alleged that certain of the company’s financial statements and projections were misleading regarding the accounting treatment of certain marketing expenses, ultimately causing Tattooed Chef to restate certain financial statements issued after the resignation of Stradling’s client. While Plaintiffs have an opportunity to file an amended complaint, the court noted specific challenges that plaintiffs would face in pleading a case against Stradling’s client. https://lnkd.in/g9Cg-_wp