Has a trial date been set for the Ira Lubert and John Martinson case involving Ledgers?
Ledgers Franchise · 2025 FDDAnswer from 2025 FDD Document
Ira Lubert and John Martinson v. John T. Hewitt, ATAX, LLC, and Loyalty, LLC (Case No 250503829) filed May 30, 2025, in the Court of Common Pleas of Philadelphia County, Pennsylvania. The Plaintiffs are investors in ATAX, LLC, and claim that they were solicited to invest in ATAX as a qualified opportunity zone business (QOZB), yet it did not qualify as a QOZB. Further, Plaintiffs claim that, as a result of the non-QOZB status, the defendants promised certain changes, some of which defendants have not made, specifically an amendment to ATAX's Operating Agreement and certain financial controls. The Plaintiffs also allege that Hewitt, with the assistance of certain Loyalty employees, made cash withdrawals from ATAX and paid those funds to himself, to Loyalty, and to other Loyalty brand companies without ATAX Board approval. The Plaintiffs sue for (1) Fraud Against Defendant Hewitt, (2) Aiding and Abetting Fraud (Against Defendant Loyalty), (3) Breach of Fiduciary Duty (Against Defendants Hewitt and Loyalty), (4) Conversion (Against Defendants Hewitt and Loyalty), (5) Breach of Contract (Against Defendants Hewitt, Loyalty, and ATAX), (6) Unjust Enrichment (Against Defendants Hewitt and Loyalty), (7) Breach of Virginia Stock Corporation Act (Against Defendants Hewitt and Loyalty), and (8) Violation of Pennsylvania Voidable Transfers Act (Against Defendants Hewitt and Loyalty). Plaintiffs seek a judgment, an order rescinding their investments, redemption of their ownership interests at a fair value, monetary damages in an amount to be determined at trial, fees, and interest. Defendants offered to buy out the Plaintiffs' investments for a profit that would be beneficial to Plaintiffs. Defendants intend to file an Answer generally denying the allegations and vigorously contesting the claims made. No trial date has been set.
Source: Item 3 — LITIGATION (FDD pages 11–16)
What This Means (2025 FDD)
According to Ledgers' 2025 Franchise Disclosure Document, a trial date has not been set for the case involving Ira Lubert and John Martinson. The document states that the lawsuit, filed on May 30, 2025, in the Court of Common Pleas of Philadelphia County, Pennsylvania, involves claims from investors in ATAX, LLC, alleging they were solicited to invest in ATAX as a qualified opportunity zone business (QOZB), but it did not qualify as such. The plaintiffs also claim that John T. Hewitt, along with Loyalty employees, made unauthorized cash withdrawals from ATAX.
The plaintiffs are suing for several claims, including fraud, breach of fiduciary duty, breach of contract, and unjust enrichment, seeking judgment, rescission of investments, redemption of ownership interests, monetary damages, fees, and interest. Ledgers' response is that the defendants offered to buy out the plaintiffs' investments for a profit and intend to file an answer denying the allegations and contesting the claims.
For a prospective Ledgers franchisee, this pending litigation highlights potential risks associated with individuals involved in the brand's leadership, specifically John T. Hewitt, who is the Chief Executive Officer and Chairman of Loyalty, LLC. While the case is not directly against Ledgers, it involves key figures and related entities, which could indirectly affect the franchise system's reputation or financial stability. It is important to note that the defendants intend to vigorously contest the claims, and the outcome of the litigation is uncertain.