WATERTOWN — A federal appellate court has ruled that the pending sale of Jreck Sub’s assets can proceed, denying a motion to stay the sale brought by the ex-wife of former Jreck principal Christopher M. Swartz.
The Swartz Family Trust, of which Tricia Patterson Swartz is a 50 percent beneficiary, has filed an appeal with the U.S. Court of Appeals for the Second Circuit, New York City, of an Aug. 9 decision rendered in U.S. District Court, Utica, that dismissed any claim the trust has to Jreck’s assets.
While that appeal remains pending, Ms. Swartz filed an emergency motion seeking a temporary stay of the sale of the sandwich chain’s assets, which were due to be sold Nov. 27 to Fresh Start Franchising Inc.
Two days before the sale was slated to close, Ms. Swartz filed a motion in district court to have the sale stayed. In a Dec. 5 ruling, Judge David N. Hurd, who had also rendered the Aug. 9 decision dismissing the trust’s claims in Jreck, rejected Ms. Swartz’s and the trust’s latest claim, stating it failed to “offer any meaningful justification for delaying the sale” and would cause “substantial prejudice” to Fresh Start Franchising Inc., the winning bidder of an auction for Jreck’s assets.
Ms. Swartz immediately filed a motion with the Court of Appeals seeking a stay of the sale while the trust’s appeal of the Aug. 9 decision remains pending. The appellate court did grant a temporary stay on Dec. 9, but according to a decision filed Thursday in District Court, a three-judge panel on Dec. 26 lifted the temporary stay and rejected the request to stop the sale of Jreck while the appeal is pending.
Documents do not show when the sale of Jreck may now be completed, but the U.S. Marshal’s Service, which has been operating Jreck since 2017, has indicated in court filings that it is seeking an expedited completion of the sale.
Christopher Swartz is serving a 12½-year federal prison sentence imposed in District Court in July 2017 for federal wire fraud and tax evasion convictions. As part of a plea agreement in the criminal case, Mr. Swartz agreed to forfeit his interests in Jreck.
Since that time, federal prosecutors have been working toward a sale of Jreck’s assets, holding an auction that was ultimately won by Fresh Start Franchising, which is headed by Matthew G. Darrah, Ponte Vedra Beach, Fla.