TGI Fridays trustee sues former executives

Stephanie Wickouski, the creditor trustee for the TGIF Creditor Trust, filed a lawsuit on Oct. 30 in U.S. Bankruptcy Court for the Northern District of Texas. The 105-page complaint names nine individuals and eight companies as defendants. Wickouski accuses these parties of running the restaurant chain into the ground through financial maneuvers that prioritized specific insiders over the brand's stability.

The suit identifies three central figures: Anil Yadav, a major franchisee and executive of parent company TGIF Holdings LLC; TriArtisan, the private equity firm that controlled the chain; and Rohit Manocha, TriArtisan’s co-founder who held leadership roles at TGI Fridays. Wickouski alleges that the defendants weakened the business by loading it with debt and selling assets during their acquisition period. She claims these actions caused the chain to lose its role as a franchise-system manager, a status that provided a critical income stream.

According to the complaint, the loss of franchise-system manager duties crippled TGI Fridays’ ability to manage its own debt. This financial strain also torpedoed a planned merger with UK-based hospitality company Hostmore. Wickouski argues that the combination of these factors led directly to the company's termination of that role and its subsequent financial collapse.

The complaint details specific alleged events that contributed to the 2024 bankruptcy. These include mishandling royalty payments, arranging loans of up to $10 million, and executives receiving payments related to those loans. The trustee also alleges that the company sold perpetual licenses to companies without properly valuing potential royalty payments and sold shares to insiders without proper valuation. Additionally, the complaint notes that TGI Fridays failed to file its 2023 tax returns.

Wickouski specifically accuses Yadav and his linked companies of owing the restaurant chain approximately $6.2 million in past-due royalties and related fees. The complaint states that the chain allowed Yadav to pay only $500,000, effectively letting him and his companies off the hook for the remaining balance.

TGI Fridays filed for Chapter 11 bankruptcy in November 2024, citing economic difficulties from the COVID-19 pandemic, the failed Hostmore merger, and the loss of its franchise-system manager role. The court approved a liquidation plan on July 28, which took effect on Aug. 31. The case remains ongoing.

Wickouski is seeking monetary damages, interest, and the recovery of money from payments improperly given to the accused. She also seeks to reject or reduce some of the defendants' bankruptcy claims and change the order in which they are paid. The defendants have until Dec. 2 to file an answer to the complaint. They have not yet responded to requests for comment.