AUSTIN (CN) – Five Red Bird/Early Bird restaurants sued Strategic Funding Source, a factoring company, claiming it paid $368,000 to a man who claimed to be authorized to sell future credit card receivables in exchange for a lump sum payment. But William Barret Brannam, who allegedly cut the deal with Strategic Funding, had no such authority, the franchisees say in Travis County Court.
Factoring companies such as the defendant may offer lump sums in exchange for a cut of future receivables. In this case, the restaurants say, Brannam took $368,000 and committed them to pay Strategic $509,000. They say Strategic has received more than $300,000 from the illegitimate arrangement. They want the deal declared null and void, and they want the credit card receivables back. They are represented by Munsch Hardt & Kopf.