💥Farr Out, Man!💥
Updates: The Franchise Group, Spirit Airlines + CareMax. Omega Files + More.
How much y’all think Willkie Farr & Gallagher LLP (“Willkie”) is missing Judge Dorsey right about now? Oh, we’ll guess…
Why? Oh, this.
For those who haven’t been mesmerized by the flames of Franchise Group Inc. and its 52 affiliates’ (collectively, the “debtors”) Wilmington, DE-based dumpster-fire – feel free to refresh your recollections here and here — Judge Silverstein sat in for His Honor at a January 21, 2025 hearing before becoming the new, full-time sheriff in town a week later, and it took her a little less than two weeks after that to deny the debtors’ retention of Willkie.
What happened? It was pretty simple actually. Three separate groups — the US trustee (the “UST”), a trust set up for victims of the Prophecy Asset Management LP (“Prophecy”) implosion, and, of course, an ad hoc group of spicy second lien and holdco lenders (the “Freedom Group”) represented by an even spicier White & Case LLP (“W&C”) and Greenhill & Co. Inc. (“Greenhill”) — took turns firing shots at Willkie’s app due to the firm’s prepetition and, in some cases, ongoing representation of Brian Kahn (the debtors’ former CEO, a former board member, and a current alleged fraudster), his affiliates, and B. Riley Financial ($RILY).*
Before you get ahead of yourselves, no, this ain’t another rehash of the Invitae Corp. or Enviva Inc. cases. Judge Silverstein didn’t engage in any judicial mental gymnastics to reconcile a 1.4%-revenue, Vinson & Elkins LLP-bouncing “actual” conflict of interest versus a 0.03%-revenue, Kirkland & Ellis LLP-approving “relatively de minimis” — but still present — conflict of interest. Hell, she didn’t even have to mention a dollar amount or percentage of revenue at all because The Artist Formerly Known as Proposed Counsel to the Debtors would be hard pressed to have had more bad facts against it. Bad facts like: