FDD Items 3 & 4 · 2026 filing

Liberty Tax Service litigation history

What Liberty Tax Service disclosed about lawsuits, arbitrations and bankruptcy in the 2026 Franchise Disclosure Document. Item 3 lists the material legal actions a franchisor must report; Item 4 covers bankruptcy. This is the franchisor's own disclosure, not a court record, and not legal advice.

Items 3 (litigation) & 4 (bankruptcy) at a glance

What the filing discloses

Cases disclosed: 29; Item 3, as counted in the filing

Largest settlement, franchisor's own cases: $150K; As stated in Item 3

Bankruptcy (Item 4): Disclosed; Franchisor, parent, predecessor or officer

Filing year: 2026; Disclosures cover the prior ten years

Item 3 (litigation) · 29 matters disclosed · 3 pending listed

Litigation cases

The franchisor

Pending (3)

JTH Tax LLC d/b/a Liberty Tax Service v. Charles C. Njoya
pending
Brought against a franchisee · filed 2025-06-09 · Virginia Beach Circuit Court · CL25-3201
“… Case No. CL25-3201, Virginia Beach Circuit Court, filed on June 9, 2025. The Complaint against former franchisee alleges breach of non- compete, breach of contract and note.”Page 13 of the 2026 FDD, Item 3
Outcome: “Trial is scheduled for May 2, 2026.”
JTH Tax LLC d/b/a Liberty Tax Service v. Temeyka Odessa Scott
pending
Brought against a franchisee · filed 2025 · U.S. District Court for the District of South Carolina · 3:25-CV-13908
“… 3:25-CV-13908, U.S. District Court for the District of South Carolina (filed December 2025). Action arising out of the termination of a franchise relationship, alleging breach of the franchise agreement, tortious interference, and related claims based on the alleged unauthorized removal of business assets and records”Page 13 of the 2026 FDD, Item 3
JTH Tax LLC v. Patrick Perez
pending
Brought against a franchisee · filed 2025-05-15 · U.S District Court, Northern District of Texas · 3:25-cv-01234
“… 3:25-cv-01234, U.S District Court, Northern District of Texas. Complaint filed on May 15, 2025 alleging breach of franchise agreement and Lanham Act violations.”Page 13 of the 2026 FDD, Item 3
Outcome: “request for default judgment is pending.”

Concluded (12)

JTH Tax LLC d/b/a Liberty Tax Service v. Anthony Focca, Platinum Ltd, Andrew Wolfe, Think Taxx Inc and David Biondi
settled
Brought against a franchisee · filed 2025-04-03 · Eastern District of New York · 1:25-CV-01850
“… 1:25-CV-01850, Eastern District of New York (filed April 3, 2025). Action alleging breach of the franchise agreement and violation of an existing injunction.”Page 13 of the 2026 FDD, Item 3
Outcome: “The matter was resolved in December 2025 by settlement of $125,000 and injunctive relief.”
JTH Tax LLC d/b/a Liberty Tax Service v. Javier Solis
settled
Brought against a franchisee · filed 2025-07-17 · Virginia Beach General District Court · GV25-22660
“… Case No. GV25-22660, Virginia Beach General District Court filed on July 17, 2025. Liberty obtained a default judgment in the amount of $25,000, $80 in costs, $1,945 in attorneys’ fees, plus interest at 12%, on August 12, 2025.”Page 13 of the 2026 FDD, Item 3
Outcome: “The parties agreed to a settlement and a settlement agreement in being circulated between counsel.”
JTH Tax LLC d/b/a Liberty Tax Service v. Mark S. Williams and Pekajo Services, Inc.
settled
Brought against a franchisee · filed 2025-08-28 · Virginia Beach General District Court · GV25-27930
“… Case No. GV25- 27930, Virginia Beach General District Court, filed on August 28, 2025. The parties agreed to a settlement and the case was dismissed on October 28, 2025.”Page 13 of the 2026 FDD, Item 3
JTH Tax LLC d/b/a Liberty Tax Service v. Roberson
settled
Brought against a franchisee · filed 2025-05-21 · U.S. District Court for the Northern District of Georgia · 1:25-cv-02845
“… Case No. 1:25-cv-02845, U.S. District Court for the Northern District of Georgia (filed May 21, 2025). Action alleging breach of the franchise agreement, breach of post-termination non-competition obligations, and trademark violations.”Page 13 of the 2026 FDD, Item 3
Outcome: “The parties settled this matter in December 2025 for $150,000.”
District of Columbia v. JTH Tax, LLC
settled
Government or regulatory action · filed 2022-09-21 · Superior Court of the District of Columbia · 2022 CA 004285
“… 2022 CA 004285, Superior Court of the District of Columbia. The DC Attorney General (“AG”) filed a complaint against JTH Tax, LLC on September 21, 2022 asserting an alleged violation of the DC Consumer Protection Procedures Act. The AG alleges that Liberty’s Cash-In-A-Flash promotion was deceptive and misleading”Page 15 of the 2026 FDD, Item 3
Outcome: “On January 9, 2024, Liberty Tax entered into a settlement agreement with the AG, wherein we agreed to: pay $550,000 for customers who participated in the cash-in-a-flash promotion between tax years 2014-2021; stop using the Cash-in-a-Flash promotion nationwide; and not create any similar incentive type program; provide the AG certain marketing data and information concerning incentive type marketing for five years ...”
Gorilla Tax Services, Inc., et al. v. JTH Tax, LLC, d/b/a Liberty Tax Service et al.
dismissed
Brought by a franchisee · filed 2021-11-02 · American Arbitration Association · 01-21-0017-9382
“… (Case No. 01-21- 0017-9382). On November 2, 2021, Claimant initiated an arbitration before the American Arbitration Association alleging breach of an area developer agreement for failure to renew and violation of the Illinois Franchise Disclosure Act (“IFDA”) and Wisconsin Franchise Disclosure Act (“WFDA”).”Page 14 of the 2026 FDD, Item 3
Outcome: “This matter was voluntarily dismissed on March 12, 2024.”
Road King Development, Inc., et al. v. JTH Tax LLC and Franchise Group, Inc.
dismissed
Brought by a franchisee · filed 2021-01-28 · U.S. District Court for the Eastern District of Virginia · 2:21-cv-00055-RAJ-LRL
“… 2:21-cv-00055-RAJ- LRL, U.S. District Court for the Eastern District of Virginia. Defendants filed a complaint on January 28, 2021 alleging breach of Defendant’s area developer agreements.”Page 14 of the 2026 FDD, Item 3
Outcome: “The Court granted summary judgment in Plaintiff’s favor on its claim for wrongful termination as to Road King.” (page 15)
United States of America v. Franchise Group Intermediate L 1, LLC, d/b/a Liberty Tax Service
concluded
Government or regulatory action · filed 2019 · United States District Court for the Eastern District of Virginia · 2:19-cv-653
“… (Case No. 2:19-cv-653) filed on or about December 3, 2019 in the United States District Court for the Eastern District of Virginia. The Department of Justice (“DOJ”) alleges that JTH Tax failed to maintain adequate controls over tax returns prepared by its franchisees,”Page 18 of the 2026 FDD, Item 3
Outcome: “On December 20, 2019, the Court granted the joint motion and the motion to seal, which fully resolved the legal proceeding initiated by DOJ.”
JTH Tax, Inc. and SiempreTax LLC v. Gregory Aime, Aime Consulting, LLC, Aime Consulting, Inc. and Wolf Ventures, Inc.
dismissed
Brought against a franchisee · filed 2016 · United States District Court for the Eastern District of Virginia
“… We and SiempreTax+ LLC filed suit in the United States District Court for the Eastern District of Virginia against the defendants, former franchisees, on June 9, 2016, as amended on June 22, 2016, claiming the defendants breached the purchase and sale agreement”Page 15 of the 2026 FDD, Item 3
Outcome: “The matter was remanded to the District Court and the Parties subsequently resolved this matter for a non-material amount (.09 million). A joint stipulation of dismissal with prejudice was filed on April 2, 2021 and the Court entered an Order on April 6, 2021 dismissing the case with prejudice.” (page 17)
Commonwealth of Virginia ex. rel. State Corporation Commission v. JTH Tax, Inc.
settled
Government or regulatory action · filed 2008 · Virginia State Corporation Commission · SEC-2008-00087
“… (Case No. SEC- 2008-00087). We received a letter dated September 17, 2008 from the Virginia State Corporation Commission (“SCC”) which claimed that our previous non-disclosure of Commonwealth of Virginia”Page 24 of the 2026 FDD, Item 3
Outcome: “In December 2008, we settled this matter whereby we agreed to pay a $10,000 penalty,” (page 25)
The People of the State of California v. JTH Tax, Inc., Employees Plus Inc. and Does 1-150
judgment
Government or regulatory action · filed 2007-02-26 · Superior Court of California, City and County of San Francisco · CCGC-07-560770
“… (Case No.CCGC-07-560770) filed on February 26, 2007, in the Superior Court of California, City and County of San Francisco. The State alleged that in prior tax seasons we marketed loans by blurring the distinction between loans and refunds, giving misleading refund time frames and other deception;”Page 22 of the 2026 FDD, Item 3
Outcome: “The Court awarded the State civil penalties of $1,161,699 and restitution of $135,886 to customers who had authorized cross collections.” (page 23)
Commonwealth of Virginia ex. rel. State Corporation Commission v. JTH Tax, Inc. (No. SEC-2008-00024)
settled
Government or regulatory action · Virginia State Corporation Commission · SEC-2008-00024
“Commonwealth of Virginia ex. rel. State Corporation Commission v. JTH Tax, Inc., (Case No. SEC- 2008-00024). Based on an investigation conducted by the Division of Securities and Retail Franchising of the Virginia State Corporation Commission, the Commonwealth alleged that we violated the Virginia Retail Franchise Act”Page 25 of the 2026 FDD, Item 3
Outcome: “To resolve the matter, we entered into a Settlement Order in March 2008 wherein we agreed to pay $4,000 costs of investigation and not violate the Act in the future.”

This list shows 15 of the 29 matters Item 3 discloses; the rest are in the filing.

Item 3 lists the litigation the franchisor must disclose; a matter against a parent, an affiliate or a named officer is not a matter against the franchisor, and pending claims are allegations, not findings.

Disclosed in the 2026 Franchise Disclosure Document

Item 4: bankruptcy

In re NextPoint Financial, Inc., et al., United States Bankruptcy Court for the District of Delaware, Case No. 23-10983 (TMH) filed July 26, 2023. On July 26, 2023, our former parent, Canadian-based NextPoint Financial Inc., in its capacity as the duly-appointed foreign representative of us and certain of our US based affiliates, filed a petition for relief under chapter 15 of title 11 of the US Bankruptcy Code (the “US Case”). ... The US bankruptcy filing was preceded by our former parent filing for debtor relief in Canada from the Supreme Court of British Columbia under the Companies' Creditors Arrangement Act R.S.C. 1985, c. C-36, as amended In The Matter of A Plan Of Compromise and Arrangement of NextPoint Financial, Inc. and Those Parties Listed On Schedule “A” Petitioners, Vancouver Registry No. S-235288 filed July 25, 2023 (the “Canadian Case”).

Disclosure signals that moved the score

How this shows up in the verdict

Extensive litigation including DOJ/IRS settlement and class actions indicates regulatory scrutiny, reputational damage, and potential ongoing compliance costs

The verdict grade is FranchiseVerdict's editorial assessment across SBA loan performance, unit growth, revenue and disclosure signals. It is not investment advice.

Before you weigh a lawsuit

How to read Item 3

A franchisor must disclose pending actions and any material civil action involving the franchise relationship, plus convictions or civil judgments for fraud, unfair or deceptive practices, or franchise-law violations, going back ten years. A case the franchisor brought against a franchisee counts too. Item 3 does not include every dispute: settled claims below the materiality line and matters resolved in private arbitration can be absent.

Questions worth asking current and former franchisees, using the contact list in Item 20:

Were you, or anyone you know in the system, party to a dispute with the franchisor?
Was it resolved by settlement, arbitration or a court, and on what terms?
Has the number of disputes gone up or down since you signed?

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