QUESTION
can trust file suit against franchisor for damages realized by trust
Asked on Jun 04th, 2015 on Franchise Law - Texas
More details to this question:
A trust owns a company - the company is a franchisee. the franchisor induces the trust to form the company to sign the franchise agreement and makes misleading statements. Later, the franchisor sues the company and gets a default judgment. Can the Trust, who is the shareholder, file suit against the franchisor based on claims like fraud, misrepresentation, RICO, Deceptive Trade Practices Act, etc. for damages realized by the Trust?
1 ANSWER
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Depending on the situation, it may be possible. However, it may also be possible to overturn the default judgment. Further, it could be interpreted that the trust could only sue through the company and thus should have brought its claims in the initial suit, which already has a judgment.
Answered on Jun 05th, 2015 at 5:39 PM