When was the case against Liberty Tax Service, an affiliate of Ledgers, filed?
Ledgers Franchise · 2025 FDDAnswer from 2025 FDD Document
nforce the final consent order.
K&A Publicidad, Inc. v. JTH Tax, Inc., d/b/a Liberty Tax Service, Liberty Tax, Inc. d/b/a Siempre Tax and John Hewitt, (Case No. CL17-4169), filed on September 5, 2017 in the Virginia Beach Circuit Court. Plaintiff is a company owned and controlled by Kirke Franz Szawronski. Plaintiff alleges that it entered into a contract with Liberty to provide promotional and strategic relationship services to help grow the SiempreTax brand. Plaintiff alleged that defendants breached the contract for failure to pay for services and seeks damages. This matter, along with the Kirke Franz Szawronski matter described below, settled on January 26, 2019, with Liberty agreeing to pay plaintiff $50,000 to settle both matters, in exchange for a release.
Kirke Franz Szawronski v. JTH Tax, Inc., d/b/a Liberty Tax Service, Liberty Tax, Inc., d/b/a Siempre Tax and John Hewitt, (Case No. CL17-4170), filed on September 5, 2017 in the Virginia Beach Circuit Court. Plaintiff was a former employee and filed a lawsuit claiming breach of employment agreement with Plaintiff by failing to pay 6-months' severance. Plaintiff also asserted a claim for defamation. This matter, along with the KK&A Publicidad, Inc. matter described above, settled on January 26, 2019, with Liberty agreeing to pay plaintiff $50,000 to settle both matters, in exchange for a release.
Asbestos Workers' Philadelphia Pension Fund, derivatively on behalf of Liberty Tax, Inc., v. John Hewitt. Defendant, and Liberty Tax, Inc., Nominal Defendant, (Case No. 2017-0883), filed on December 12, 2017 in the Court of Chancery of the State of Delaware. Plaintiff alleged that
Liberty's former CEO, John T. Hewitt ("Hewitt"), breached his fiduciary duties as an officer based upon certain allegations of misconduct on his part. The Plaintiff also alleged breach of fiduciary duty against Hewitt in his capacity as a director of LT Inc. The Complaint sought compensatory damages and attorney's fees.
Source: Item 3 — LITIGATION (FDD pages 11–16)
What This Means (2025 FDD)
According to Ledgers's 2025 Franchise Disclosure Document, there were multiple cases filed against Liberty Tax Service.
Specifically, K&A Publicidad, Inc. v. JTH Tax, Inc. and Kirke Franz Szawronski v. JTH Tax, Inc. were both filed on September 5, 2017. Asbestos Workers' Philadelphia Pension Fund, derivatively on behalf of Liberty Tax, Inc., v. John Hewitt was filed on December 12, 2017. Bablu Shahabuddin v. JTH Tax, Inc. was filed on January 11, 2018. JTH Tax LLC d/b/a Liberty Tax Service v. John T. Hewitt, Loyalty LLC, ATAX LLC, ATAX Franchise, Inc. and Yneva Marte was filed February 4, 2021. RSL Senior Partners, LLC, derivatively and on behalf of Liberty Tax, Inc. v Brunot et al was filed on March 7, 2018. Erie County Employees Retirement. System, on behalf of Liberty Tax, Inc. v. John T. Hewitt was filed December 22, 2017. United States of America v. Franchise Group Intermediate L 1, LLC d/b/a Liberty Tax Service was filed on or around December 3, 2019.
These lawsuits cover a range of allegations, from breach of contract and employment agreements to trademark infringement, breach of fiduciary duty, and failure to maintain adequate controls over tax returns prepared by franchisees. Several of these cases have been settled, with Liberty Tax agreeing to pay settlements ranging from $50,000 to $775,000, and agreeing to certain restrictions.
Prospective Ledgers franchisees should note that while these lawsuits do not directly involve Ledgers, they do involve an affiliate, Liberty Tax Service, and its former CEO, John T. Hewitt, who is now associated with Loyalty LLC, which is affiliated with Ledgers. This history of litigation may indicate potential risks or challenges associated with the management and operations of affiliated companies.