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FAT Brands CEO Faces Suspension Over Stock Sale
7 Feb
Summary
- Lenders want CEO suspended without pay for unapproved stock sale.
- FAT Brands sought court protection in January for debt servicing issues.
- Creditors previously accused CEO of 'looting' company funds.
Lenders are seeking to suspend FAT Brands CEO Andrew Wiederhorn without pay due to a recent stock sale of its Twin Peaks chain. This action intensifies a control battle as FAT Brands undergoes restructuring. The creditor group, holding nearly $1 billion in notes, alleges Wiederhorn sold 9 million Twin Peaks shares without court approval.
They also claim he failed to consult restructuring advisors or independent board members on the $3.1 million transaction with White Lion Capital LLC. FAT Brands, which operates about 2,200 locations across 18 brands, filed for Chapter 11 bankruptcy protection in January. It cited debt servicing costs as the cause of its financial distress.
This situation follows earlier accusations by the same lenders that Wiederhorn "looted" the company for personal gain. Both the company and Wiederhorn have denied all allegations. FAT Brands stated it would not sell more equity without prior court approval during the Chapter 11 process.
