Fraudulent Bankruptcy Filings Reveal Court System’s Loophole

Publicly traded US companies have been hit by a series of bankruptcy hoaxes

A Burger King fast food restaurant in the Queens borough of New York, US, on Sunday, Feb. 11, 2024. Carrols Restaurant Group, the chain’s largest franchisee, was subject to a series of fraudulent bankruptcy filings last month. — A Burger King fast food restaurant in the Queens borough of New York, US, on Sunday, Feb. 11, 2024. Carrols Restaurant Group, the chain’s largest franchisee, was subject to a series of fraudulent bankruptcy filings last month.
Photographer: Bing Guan/Bloomberg

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By Jonathan Randles and Steven Church

March 5, 2024 at 5:18 PM UTC

This article is for subscribers only.

Welcome to The Brink. It’s Jonathan Randles in New York and Steve Church in Wilmington, Delaware, where we’re looking at how a slew of fraudulent bankruptcy filings exposed a weakness in US courts. We also have the latest on Byju’s and Spirit Air. Follow this link to subscribe. Send us feedback and tips at debtnews@bloomberg.net or DM on X to @sparkyrandles.

An upstate New York man filing fraudulent corporate bankruptcy petitions is highlighting a potentially destructive loophole in the way insolvencies are processed in the US.