FAT Brands CEO Andy Wiederhorn says $1.26 billion in debt is not guaranteed by parent company

Core Viewpoint - FAT Brands is facing significant financial challenges, with a complicated debt structure of $1.26 billion that is not guaranteed by the parent company, allowing for potential bankruptcy of individual brands without affecting the entire company [2][5]. Debt Structure - The company's debt is distributed across five securitization trusts and involves multiple layers of investors, which is intended to isolate financial risk [2]. - The debt restructuring process has been complicated by the involvement of approximately 25 different investors or note holders who have not reached a consensus on a solution [5]. Debt Restructuring Efforts - The CEO has been in discussions with note holders for 18 months to two years regarding debt restructuring, but negotiations have not been constructive [3]. - The company is exploring various avenues to lower its debt and make it more manageable, although the process may take several rounds to resolve [3]. Financial Performance - Despite the substantial debt, FAT Brands reported $60 million in free cash flow, indicating that the company is still in a relatively stable position [5]. - The CEO believes that restructuring the debt stack is essential for the company's financial health and urges note holders to reach a conclusion soon [5]. Impact of Legal Issues - A three-year federal criminal investigation into the CEO for fraud and money laundering, which concluded in his favor, has strained the company's financial resources and complicated the debt restructuring process [4].