💥New Chapter 11 Bankruptcy Filing - Buddy Mac Holdings, LLC💥
Buddy and franchisee of Franchise Group, Inc. gets jealous, files its own chapter 11 cases
On December 1, 2025, Buddy Mac One, LLC, and three affiliates (collectively, the “earlier debtors”) filed chapter 11 bankruptcy cases in the Northern District of Texas (Judge Larson) only to be joined three days later by Buddy Mac Holdings, LLC and forty-four affiliates (together with the early debtors, “Buddy Mac” or the “debtors”). Founded in ‘14, the debtors are franchisees of Buddy’s Home Furnishings (“Buddy’s). You know, one of the “businesses” caught up in last year’s Franchise Group, Inc. (“FRG”) and Brian Kahn sh*tshow.
At one time, the debtors operated 84 rent-to-own furniture and application stores in states stretching from the Gulf of Mexico to the Great Lakes plus, for good measure, Florida.
Now that figure is now down to 47. For which the debtors provided zero explanation in either of managing member William Ian MacDonald’s or CRO Mark Shapiro’s first-day declarations.
Was that over time or did y’all pull an On The Border by slimming up right before filing? Inquiring minds want that info front and center.
Anyway, obviously, the FRG and Buddy’s bankruptcy cases have their fingerprints all over this set of filings:
📍 Suppliers. “Almost immediately …” after FRG’s petitions hit the docket in November ‘24, suppliers stopped extending credit to Buddy Mac because they were too stupid not to conflate it with FRG. The debtors’ name definitely doesn’t help, but they had their own, separate agreements. Reduced stock meant reduced revenues.
📍 Customers. Certain of Buddy Mac’s customers also had a negative impact on revenue. Apparently they too conflated the entities, thought they had received a …
… and, lol, stopped making their monthly payments to the debtors.
📍Franchise Violations. The debtors allege that Buddy’s violated its franchise agreements by “enabling” its affiliate, American Fright, to operate rent-to-own furniture and appliances stores in Buddy Mac’s franchise territories. Buddy Mac has asserted over $34mm in related claims plus $4mm in other claims, while Buddy’s asserts ~$643k in unpaid franchise obligations.
📍Unprofitable Stores. Apparently Buddy Mac never negotiated for the right to close unprofitable locations, so, under the franchise agreements, Buddy’s forced the debtors to keep losing stores open and continue paying franchise royalties. NGL, a great deal for Buddy’s.
📍 Unwanted Publicity. The debtors’ prepetition lender, INTRUST Bank, N.A. (“INTRUST”), walked. We’ll let managing member and first-day declarant William Ian MacDonald take this one:
“It is my belief that, given FRG’s bankruptcy and all the publicity surrounding it, INTRUST and other lenders were not willing to take on any new exposure in the rent-to-own industry. The inability to renew the RTO Loan or obtain alternative financing severely hindered the Company’s ability to purchase new inventory, which, following the credit issues with its suppliers … led to even further declines in the Company’s revenues.”
INTRUST’s ~$12.6mm loan matured on August 31, 2025,* and it wasted no time GTFO’ing.** On September 2, 2025, INTRUST sold its position to Phonix RBS, LLC (“Phonix”). That entity is also covered in FRG’s fingerprints.
For the details, let’s go to the tape. Here’s debtors’ counsel, John Kane of Kane Russell Coleman Logan PC, at the December 8, 2025 first-day hearing:
“… American Freight now operates in the rent-to-own space and the owner of AF Newco, which is operating a significant number of American Freights, is a gentleman by the name of Brent Turner. And Brent Turner also happens to be the founder of Phonics RBS, which is the now, and I’ll put in quotes, ‘lender.’
… Phonix was formed in February of 2025, almost immediately after AF Newco, headed by Brent Turner, completed its acquisition of a conglomerate or large chunk of American freight stores out of the FRG bankruptcy… We believe that Phonix RBS was created by Brent Turner as an acquisition vehicle. So essentially, Brent Turner could recreate to some degree the, we’ll call it, rent-to-own portfolio that was previously at FRG.
Now, we also have continued disputes because after the opening of American Freight stores and some transitions to rent-to-own, we have a direct competitor that’s operating in some of the same territorial regions that the Buddy’s Furniture stores that we previously operated was operating in, and so we’ve had this kind of series of constrictive events that has caused us to decline from 84 operating stores to now 47 operating stores.”
Well, at least that’s something on the store count decline. Then Mr. Kane went through the current gore playing out on the FRG bankruptcy docket that we covered here. In short, despite evidence presented to the contrary, FRG’s former CEO and fraud indictee Brian Kahn is not only involved AF Newco I, LLC’s business, but is actually running it.
Anyway, back to these cases, Phonix quickly turned to enforcing remedies to Frankenstein the FRG business back together. On October 23, 2025, it filed a suit for payment in Kansas state court and had an emergency application to appoint a receiver set for a December 2, 2025 hearing but is now pending removal to federal court.*** Phonix separately initiated foreclosure proceedings on debtor properties in Tyler, Texas, Caruthersville, Missouri, and Marion, Illinois, which are now stayed.
So, in chapter 11, what is Buddy Mac hoping to accomplish? Good question. The debtors filed without a plan or DIP financing … or, not surprisingly, even telling Phonix they were going in.
We’d venture a sale is on the horizon, but while the debtors’ scratch their head, they are looking to run the biz using Phonix’s cash collateral for five weeks, which was a paltry $11.3k (no, that’s not a typo) as of filing.
Although Phonix, naturally, wasn’t signed off on that. Late on December 7, 2025 – the night before the first-day hearing – it filed an objection to the debtors’ cash collateral motion, cash management motion, and all other first day papers alleging a lack of adequate protection and that budget ☝️ not being sufficient to preserve the debtors’ going concern. From the objection:
“Phonix understands that the Debtors require at least $2.5 million of inventory purchases during the five-week budget period from the commencement of these cases through January 3, 2026—and realistically such purchases are required immediately, in order to create sufficient inventory for the Debtors to rent to customers and generate cash and receivables during the holiday season to continue to generate revenues at levels similar to those in the forecast or consistent with recent historical performance.”
It also wasn’t cool with the debtors’ attempt to include a pipeline + $250k carveout for professional fees or pay other subordinated claims in the interim period (e.g., landlords and insiders).
Needless to say, the December 8, 2025 first-day hearing got off to a rough start. It stayed rough too and lasted ~5.25 hours, although a significant chunk of that was dedicated to backstory and Phonix’s cross of Messrs.
McDonald and Shapiro. Neither was particularly interesting, so trimming the fat, the court had no intention of outright starving the debtors of what little cash was available. After giving Phonix enhanced notice rights, beefing up adequate protection, and removing the carveout (except for US trustee fees), the court granted interim approval of that and all other first day relief.
The second day hearing is scheduled for January 5, 2026 at 10:30am CT, by which point the debtors will have worked out a deal with Phonix or everyone will be back to litigating about an expected ~14.6k in cash.
The debtors are represented by Kane Russell Coleman Logan PC (Joseph Coleman, John Kane, Kyle Woodard, JaKayla DaBera, Mark Taylor, Casey Roy) as legal counsel and GlassRatner Advisory & Capital Group LLC (Mark Shapiro) as financial advisor. Phonix is represented by Blank Rome LLP (David Clem, Michael Schaedle, Matthew Kaslow, Jordan Williams).
*The figure is inconsistent throughout the docs. Per the debtors, it’s either ~$12.6mm or ~$11.9mm. We went with the one from the cash collateral motion. Phonix, however, asserts the figure it at least ~$12.8mm and growing.
**The debtors also have ~$3.4mm in debentures and convertible notes and ~$3.3mm in trade payables outstanding.
***Phonix calls the removal “baseless” and is being opposed “… on an expedited basis due to a clear lack of diversity between the parties.” On December 4, 2025, Phonix sued Mr. MacDonald for damages under fraud and negligent misrepresentation theories.
Company Professionals:
Legal: Kane Russell Coleman Logan PC (Joseph Coleman, John Kane, Kyle Woodard, JaKayla DaBera, Mark Taylor, Casey Roy)
Financial Advisor and CRO: GlassRatner Advisory & Capital Group LLC (Mark Shapiro)
Claims Agent: Epiq (Click here for free docket access)
Other Parties in Interest:
Prepetition Lender (by succession): Phonix RBS, LLC
Legal: Blank Rome LLP (David Clem, Michael Schaedle, Matthew Kaslow, Jordan Williams)