FAT Brands Announces Proposed Settlement of Stockholder Derivative Lawsuits
FAT Brands (NASDAQ: FAT) has announced a proposed settlement for two stockholder derivative lawsuits filed in Delaware's Court of Chancery. The lawsuits, filed in June 2021 and March 2022, concerned the company's December 2020 merger with Fog Cutter Capital Group and June 2021 recapitalization.
Under the settlement terms, FAT Brands will receive $10 million from insurers (subject to deduction of plaintiffs' counsel fees) and 200,000 shares of Twin Hospitality Group Inc. (NASDAQ: TWNP) from Fog Cutter Holdings LLC. The company's Board will implement certain corporate governance modifications. The settlement requires Court approval and non-objection from the United States.
FAT Brands (NASDAQ: FAT) ha annunciato una proposta di accordo per due cause derivanti da azioni degli azionisti intentate presso la Corte di Cancelleria del Delaware. Le cause, presentate a giugno 2021 e marzo 2022, riguardavano la fusione della societ脿 con Fog Cutter Capital Group del dicembre 2020 e la ricapitalizzazione del giugno 2021.
Secondo i termini dell'accordo, FAT Brands ricever脿 10 milioni di dollari dagli assicuratori (al netto delle spese legali degli attori) e 200.000 azioni di Twin Hospitality Group Inc. (NASDAQ: TWNP) da Fog Cutter Holdings LLC. Il Consiglio di Amministrazione della societ脿 attuer脿 alcune modifiche nella governance aziendale. L'accordo necessita dell'approvazione del Tribunale e del mancato obiettivo da parte degli Stati Uniti.
FAT Brands (NASDAQ: FAT) ha anunciado un acuerdo propuesto para dos demandas derivadas de accionistas presentadas en la Corte de Canciller铆a de Delaware. Las demandas, presentadas en junio de 2021 y marzo de 2022, estaban relacionadas con la fusi贸n de la compa帽铆a con Fog Cutter Capital Group en diciembre de 2020 y la recapitalizaci贸n de junio de 2021.
Seg煤n los t茅rminos del acuerdo, FAT Brands recibir谩 10 millones de d贸lares de los aseguradores (sujeto a la deducci贸n de honorarios legales de los demandantes) y 200,000 acciones de Twin Hospitality Group Inc. (NASDAQ: TWNP) de Fog Cutter Holdings LLC. La Junta Directiva de la empresa implementar谩 ciertas modificaciones en la gobernanza corporativa. El acuerdo requiere la aprobaci贸n del Tribunal y la no objeci贸n de los Estados Unidos.
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FAT Brands (NASDAQ: FAT) a annonc茅 un r猫glement propos茅 concernant deux poursuites d茅riv茅es d'actionnaires d茅pos茅es aupr猫s de la Cour de chancellerie du Delaware. Les poursuites, d茅pos茅es en juin 2021 et mars 2022, concernaient la fusion de la soci茅t茅 avec Fog Cutter Capital Group en d茅cembre 2020 et la recapitalisation de juin 2021.
Selon les termes du r猫glement, FAT Brands recevra 10 millions de dollars des assureurs (sous d茅duction des frais d'avocat des plaignants) et 200 000 actions de Twin Hospitality Group Inc. (NASDAQ: TWNP) de Fog Cutter Holdings LLC. Le conseil d'administration de la soci茅t茅 mettra en 艙uvre certaines modifications de la gouvernance d'entreprise. Le r猫glement n茅cessite l'approbation du tribunal et l'absence d'objection des 脡tats-Unis.
FAT Brands (NASDAQ: FAT) hat einen vorgeschlagenen Vergleich f眉r zwei Aktion盲rsderivatklagen angek眉ndigt, die vor dem Delaware Court of Chancery eingereicht wurden. Die Klagen, eingereicht im Juni 2021 und M盲rz 2022, betrafen die Fusion des Unternehmens mit Fog Cutter Capital Group im Dezember 2020 sowie die Rekapitalisierung im Juni 2021.
Gem盲脽 den Bedingungen des Vergleichs erh盲lt FAT Brands 10 Millionen US-Dollar von Versicherern (abz眉glich der Anwaltskosten der Kl盲ger) und 200.000 Aktien der Twin Hospitality Group Inc. (NASDAQ: TWNP) von Fog Cutter Holdings LLC. Der Vorstand des Unternehmens wird bestimmte 脛nderungen in der Unternehmensf眉hrung umsetzen. Der Vergleich bedarf der Genehmigung durch das Gericht und der Nichtbeanstandung durch die Vereinigten Staaten.
- Settlement resolves all claims without admission of liability or wrongdoing
- Company to receive $10 million payment from insurers
- Additional compensation of 200,000 TWNP shares from Fog Cutter Holdings
- Implementation of corporate governance improvements
- Settlement subject to Court approval and US non-objection, creating uncertainty
- Portion of $10 million settlement will be reduced by plaintiffs' counsel fees
- Resolution of lawsuits indicates previous corporate governance issues
Insights
FAT Brands' $10M settlement plus stock contribution resolves significant derivative lawsuits while avoiding admission of wrongdoing.
FAT Brands has negotiated a potentially favorable resolution to two significant stockholder derivative lawsuits dating back to 2021-2022. The settlement structure is strategically crafted to protect both the company and its leadership while still delivering
What makes this settlement particularly notable is that it requires no admission of liability or wrongdoing by any defendants or the company itself. Instead of costly monetary penalties paid directly by executives, the agreement centers on corporate governance modifications - typically indicating changes to board structure, oversight procedures, or compliance mechanisms that address the underlying concerns without financial penalties for individuals.
The timing is significant as these lawsuits stemmed from major corporate transactions: the December 2020 merger with Fog Cutter Capital Group and the June 2021 recapitalization. These actions likely raised concerns about conflicts of interest or fairness to minority shareholders, common triggers for derivative litigation.
While the settlement appears favorable, investors should note the contingencies: court approval and non-objection from the United States government are still required. This suggests potential regulatory interest in the underlying transactions, adding a layer of uncertainty to the resolution timeline. The forward-looking statements caution indicates management recognizes these approval processes aren't merely formalities.
LOS ANGELES, Aug. 04, 2025 (GLOBE NEWSWIRE) -- 听(狈础厂顿础蚕: FAT) (the 鈥淐ompany鈥�) announced today that it has entered into a stipulation of settlement to resolve two stockholder derivative lawsuits pending in the Court of Chancery of the聽State of Delaware聽(the "Court") on behalf of the Company against certain current and former directors and officers of the Company. The stockholder derivative claims were filed in June 2021 (Case No. 2021-0511-NAC, relating to the Company鈥檚 December 2020 merger with Fog Cutter Capital Group), and March 2022 (Case No. 2022-0254-NAC, relating to the Company鈥檚 June 2021 recapitalization).
The settlement will resolve all claims asserted against the named defendants in the derivative lawsuits without any liability or wrongdoing attributed to them personally or the Company. Under the terms of the proposed settlement, the Company鈥檚 Board of Directors agreed to adopt and implement certain corporate governance modifications. In addition, the Company鈥檚 insurers will pay to the Company聽
The settlement is subject to approval of the Court, and non-objection by the United States.
About FAT (Fresh. Authentic. Tasty.) Brands
FAT Brands (NASDAQ: FAT) is a leading global franchising company that strategically acquires, markets, and develops fast casual, quick-service, casual dining, and polished casual dining concepts around the world. The Company currently owns 18 restaurant brands: Round Table Pizza, Fatburger, Marble Slab Creamery, Johnny Rockets, Fazoli鈥檚, Twin Peaks, Great American Cookies, Smokey Bones, Hot Dog on a Stick, Buffalo鈥檚 Cafe & Express, Hurricane Grill & Wings, Pretzelmaker, Elevation Burger, Native Grill & Wings, Yalla Mediterranean and Ponderosa and Bonanza Steakhouses, and franchises and owns over 2,300 units worldwide. For more information on FAT Brands, please visit .
Forward Looking Statements
This news release contains forward-looking statements within the meaning of certain securities laws, including the Private Securities Litigation Reform Act of 1995, including statements regarding the agreement to settle the pending derivative lawsuits, and other statements that are not purely historical facts. These statements involve risks and uncertainties, including, among others, the uncertainty of obtaining court approval and non-objection by the United States of the proposed settlement, whether any proposed settlement is appealed, and the timing of the settlement payment. There can be no assurance that the litigation will be finally resolved in accordance with the agreement or at all. For a further description of additional risks and uncertainties relating to the business of the Company, see the Company鈥檚 filings with the Securities and Exchange Commission, including the Company鈥檚 Annual Report on Form 10-K and Quarterly Reports on Form 10-Q. Any forward-looking statements are made only as of the date hereof and the Company does not intend to update or revise any of them, except as required by law.
MEDIA CONTACT:
Erin Mandzik, FAT Brands
860-212-6509
FAQ
What is the settlement amount in FAT Brands' stockholder derivative lawsuits?
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