Franchises Lose Diet Center Suit

A six-year battle over who did what to whom during the sale of Diet Center is all but over.

A Superior Court judge in California has ruled against franchises of the once multi-million Rexburg firm and said there was no fraudulent conveyance in the leveraged buyout of the firm in 1988.

Some of the company’s franchise owners had waged a battle over the sale of the company that they claimed had bankrupted it and them. They claimed that the sale had burdened the company with so much debt that fees were raised that in essence drove franchises out of business. It said the company acquired so much debt it could not make its payments. The judge disagreed with the franchise owners.