WATERTOWN — The U.S. Marshals Service will open the process of auctioning off the Jreck Subs franchise early next month and plan to have the winning bidder known by early November.
The north country sandwich shop mainstay was ordered sold by a federal judge in August in the wake of the September 2016 conviction in U.S. District Court of Jreck’s principal owner, Christopher M. Swartz, on federal wire fraud and tax evasion counts. In July 2017, Mr. Swartz was sentenced to 12½ years in federal prison and ordered to pay a total of $25 million in restitution. He was also ordered to forfeit any ownership interest in Jreck.
Since that time, Jreck has been operated by the U.S. Marshal’s Service while a dispute has been waged in federal court over who actually owns Jreck’s assets. Four claimants - Edward St. Onge and Orienta Investors LLC, Change Capital Partners Fund I LLC, the Swartz Family Trust, and Continental Trust Corporation Limited - filed petitions with the court asserting an interest in Jreck.
Judge David N. Hurd’s Aug. 9 decision ordering the sale of Jreck’s assets dismissed all claims in the business by Change Capital Partners, the Swartz Family Trust and Continental Trust, leaving only Mr. St. Onge and Orienta Investors as possible claimants. However, he has ruled that the auction proceed, with any decision regarding the extent of what Orienta may be due from the sale to come at a later date.
According to a prepared statement issued Monday by the U.S. Marshals Service, potential bidders must complete all registration requirements by Oct. 7, including a $100,000 deposit. Deposits will be returned to nonwinning bidders. A two-week due diligence period will then allow approved bidders the opportunity to review key financial and contract information associated with the assets. A sealed bid auction will take place Oct. 24 to Oct. 31. Following that initial round, the top four bidders will be invited to submit best-and-final bids Nov. 4 to Nov. 8.
It is expected that the winning bidder will be notified by 5 p.m. Nov. 8. and will be required to close the transaction by Nov. 21, the marshal service said.
Further details are available at www.usmarshals.gov/assets/2019/jreck-subs.
Jreck was founded in Watertown in 1967 by three school teachers who began selling subs out of a decommissioned school bus outside then Camp Drum.