What was the effect of the settlement on the claims against Brand and Hollingsworth in the lawsuit involving Cinnaholic's affiliate, The S&Q Shack, LLC?
Cinnaholic Franchise · 2025 FDDAnswer from 2025 FDD Document
creditor in those cases. After the amount of the claim was adjudicated by the bankruptcy court, the Bankrupt Estate, the trustee, BV Retail and all of the defendants (except for Brand and Hollingsworth) successfully mediated the claims to a global resolution in November 2016. The parties subsequently executed a settlement agreement and an order approving settlement and dismissing this proceeding followed in 2017. This case and the one described below were settled jointly upon payment to debtor (through the Trustee) of the sums of $310,000 paid by Mr. Sprock and $90,000 paid by Mr. Seydel. This settlement was approved by the Bankruptcy Court and mutual general releases were enter
Source: Item 3 — LITIGATION (FDD pages 9–11)
What This Means (2025 FDD)
According to Cinnaholic's 2025 Franchise Disclosure Document, a lawsuit involving Cinnaholic's affiliate, The S&Q Shack, LLC, was resolved through mediation and a subsequent settlement agreement. The lawsuit, filed in 2012, involved claims of fraudulent transfers and wrongful distributions related to the sale of The S&Q Shack, LLC. Robert Brand and J. Randall Hollingsworth were among the defendants in this case.
The claims against Brand and Hollingsworth, along with those against other defendants except for two, were successfully mediated to a global resolution in November 2016. Following the mediation, a settlement agreement was executed, and in 2017, an order was issued approving the settlement and dismissing the proceeding. The case was settled jointly with another case upon payment to the debtor (through the Trustee) of $310,000 paid by Mr. Sprock and $90,000 paid by Mr. Seydel.
The settlement was approved by the Bankruptcy Court, and mutual general releases were entered into among all parties, including Brand and Hollingsworth. This means that all claims against them related to this lawsuit were dropped as part of the settlement. For a prospective Cinnaholic franchisee, this indicates that while Cinnaholic and its related parties have been involved in litigation, this particular case involving Brand and Hollingsworth was resolved with their participation in a settlement and subsequent release from any further liability.