Earlier this month, the SEC notified FAT Brands that chairman Andrew Wiederhorn and one former and current employee of the company may face civil charges.
The group received a “Wells Notice,” a letter the SEC sends to companies at the end of an investigation. The message shares that the agency may file a civil lawsuit and allows the targeted company to respond as to why it should not file a lawsuit. A Wells Notice is not a formal accusation of wrongdoing or a determination that the recipient has violated any law.
“FAT Brands has been cooperating with government investigations into events that occurred before 2020,” the company said in a statement. “The company does not believe it committed any wrongdoing and plans to take strict action against the Wells notice.”
In early 2022, it was reported that Wiederhorn was under federal investigation in connection with criminal charges including securities fraud and money laundering. The home of Wiederhorn's son Thayer and his daughter-in-law was searched in December 2021, according to search warrant records. The U.S. Attorney's Office said FAT Brands itself was not a target of the investigation, but Mr. Wiederhorn maintained his innocence.
He said the investigation was filed in response to a shareholder lawsuit alleging irregularities in the merger between FAT Brands and Wiederhorn's company Fog Cutter Capital Group in late 2020. Ta. The complaint alleges that Mr. Wiederhorn received millions of dollars in loans from Fog Cutter, and that Fog Cutter borrowed funds to obtain financing. FAT brand. Fog Cutter waived his loan to Wiederhorn, but FAT Brands still owed money. According to the complaint, Mr. Wiederhorn orchestrated a merger between Fog Cutter and FAT Brands to eliminate his debts.
Wiederhorn, who previously served time in prison on federal tax charges, criticized media reports as inaccurate and said his “personal history” would influence government officials investigating shareholder complaints. He said he is doing so. He maintained that all transactions were handled transparently and under the supervision of experts.
Wiederhorn announced in March 2023 that he would step down as CEO to avoid disrupting the company, but remained chairman of the board. It has been announced that Ken Kewik and Rob Rosen will become co-CEOs in May 2023. The company also repositioned its board of directors. Most of the board of directors was replaced by a new group, including Wiederhorn's three children (Mason, Taylor, and Thayer Wiederhorn) and their grandfather, Donald Berchtold.
FAT Brands owns 18 restaurant brands: Round Table Pizza, Fatburger, Marble Slab Creamery, Johnny Rockets, Fazoli's, Twin Peaks, Smokey Bones, Great American Cookies, Hot Dog on a Stick, Buffalo's Cafe & Express, and Hurricane. Grill & Wings, Pretzelmaker, Elevation Burger, Native Grill & Wings, Yala Mediterranean, Ponderosa, and Bonanza Steakhouse.
The company operates a franchise and has approximately 2,300 units worldwide. Last year, FAT Brands opened 125 new stores and added more than 200 locations to its 1,200-unit development pipeline. The company plans for his 150 job openings in 2024.
FAT Brands' main focus these days has been on ways to reduce debt, including organic growth, the Twin Peaks IPO, and the expansion of its Atlanta pretzel and cookie dough factory.
