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Check identity, role and dates
Coverage can include specified foreign insolvency proceedings as well as U.S. bankruptcy. An insolvency proceeding deals with financial distress under the relevant law. Check the actual entity or person, their relevant role, dates and outcome against the prescribed item; a shared name or general search result is insufficient.
Read today’s finances separately
An older proceeding involving a covered person or business may need disclosure even though the U.S. seller is new. Its presence does not by itself predict the seller’s failure, and its absence is not a complete financial assessment.
For present resources and support commitments, read the relevant financial statements and guarantees under Item 21.
Scope
- This explains the selected federal disclosure item. State and territorial requirements and the terms of the particular offer remain separate.
Next step
Check the required ten-year history using the dated FDD, then assess current finances through the separate financial disclosures.
Sources & review notes
Federal Franchise Rule
FTC overview · Compliance Guide · Guide PDF · Current regulation
Federal Trade Commission
Passage, dates and research notes
primary · Item 4: Bankruptcy
Disclose cases, actions, and other proceedings under the laws of foreign nations relating to bankruptcy.
Current substantive item read in full from current eCFR. This guide explains selected management implications; it is not a substitute for all prescribed disclosure text.
Federal Trade Commission
Passage, dates and research notes
primary · section-436.6
Respond fully to each disclosure Item.
Current eCFR displayed through 2026-11-09; eCFR is authoritative but not the official legal edition.
Detailed rule records (1)
Item 4 addresses specified bankruptcy histories during the ten-year period before the FDD date, including covered entities and individuals and foreign insolvency proceedings. A bankruptcy entry needs its identity, dates, role and outcome understood.
16 CFR §436.5(d): FDD Item 4Keep this reading in your learning library.
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