What was the reported fair value of Checkers' finance right-of-use assets after the Out-of-Court Restructuring?
Checkers Franchise · 2025 FDDAnswer from 2025 FDD Document
ns, financial position and cash flows of CDI, and its subsidiaries. All significant intercompany accounts and transactions have been eliminated in consolidation. We consolidate all entities where the Company is deemed to have a controlling or voting financial interest, including those that are wholly owned subsidiaries.
As a result of the Out-of-Court Restructuring as further discussed below and in Note 4. Business Combination, periods prior to June 16, 2023 reflect the financial statements of CDI prior to the Out-of-Court Restructuring, (referred to herein as "Predecessor"). The period subsequent to June 16, 2023 reflects the financial statements of CDI after the Out-of-Court Restructuring (referred to herein as "Successor"). As the Out-of-Court Restructuring resulted in a change in control of CDI's parent, the Company elected to apply pushdown accounting, thus assets and liabilities were recorded at their fair values at the date of the Out-of-Court Restructuring. Due to the changes in the accounting basis of assets and liabilities, the Successor and Predecessor financial statements are not necessarily comparable. Where applicable, a black line separates the Successor and Predecessor periods to highlight the lack of comparability.
Predecessor
On April 25, 2017, pursuant to the merger agreement (the "Merger Agreement") dated as of March 18, 2017, among Checkers Holdings, Inc.
Source: Item 21 — FINANCIAL STATEMENTS (FDD page 91)
What This Means (2025 FDD)
Based on the 2025 FDD, the document discusses the fair value of assets and liabilities after Checkers' Out-of-Court Restructuring. It explains that the company applied pushdown accounting, recording assets and liabilities at their fair values as of the restructuring date. However, the provided excerpts do not explicitly state the exact fair value of the finance right-of-use assets after the Out-of-Court Restructuring.
The FDD mentions that determining these fair values involves significant judgment and the use of estimates and assumptions, including those related to future cash flows, discount rates, and market multiples. This suggests that the valuation process is complex and forward-looking.
To obtain the specific fair value of the finance right-of-use assets, a prospective Checkers franchisee should review Note 8 - Property and Equipment, Net, as referenced in chunk 5, and/or directly ask the franchisor for this information. Understanding the valuation of these assets is crucial for assessing the financial health and stability of Checkers post-restructuring.