B. Riley Financial, the Westwood-area financial services firm, said Monday that it has sold a majority stake in its Great American appraisal and liquidation business for nearly $400 million — a move meant to lower its debt as it struggles with the fallout from a deal that turned sour. The deal with Oaktree Capital Management will earn the company about $203 million in cash and a 47% stake valued at roughly $183 million in a new holding company it is forming with Oaktree.
Riley as it probes the firm's relationship with Kahn, 50, who resigned as chief executive of Franchise Group but has not been charged with any crime and has denied any wrongdoing at Prophecy. John Hughes, Prophecy's co-founder, pleaded guilty Nov. 2 to conspiracy to commit securities fraud. Riley, 57, has denied knowledge of any alleged wrongdoing at Prophecy.