FAT Brands and Twin Hospitality file for Ch. 11 bankruptcy

Core Viewpoint - FAT Brands and its affiliates, including Twin Hospitality, have filed for Chapter 11 bankruptcy due to significant liabilities and liquidity issues [1] Group 1: Bankruptcy Filing Details - The bankruptcy filing estimates both liabilities and assets in the range of $1 to $10 billion and requests joint administration of all FAT Brands affiliates [2] - The filing includes brands such as Fazoli's, Round Table Pizza, Johnny Rockets, Smokey Bones, Fatburger, and Fog Cutter Capital [2] Group 2: Strategic Decisions and Financial Context - FAT Brands sought strategic alternatives, including restructuring options, and determined that bankruptcy protection was in the best interest of stakeholders [3] - The filing follows a lawsuit from the largest bondholder, Investor 352 Fund, for $109 million related to Class B Common stock tied to Twin Peaks [3] - Last November, FAT Brands owed $1.26 billion to debtors, which was declared immediately due, and the company indicated it lacked the liquidity to repay these loans [4] Group 3: Leadership and Future Plans - CEO Andy Wiederhorn mentioned that the debt is not guaranteed by the parent company and has been in discussions with bondholders for restructuring [4] - The company’s acquisition strategy in 2022 and the spinoff of Twin Peaks were aimed at reducing debt costs [4] - A federal criminal investigation into Wiederhorn for fraud and money laundering, which ended favorably for him, further strained the company's financial resources [5] Group 4: Bankruptcy Process Goals - In a letter to franchisees, Wiederhorn stated that the bankruptcy process will be used to optimize capital structure, reduce debt obligations, and enhance financial flexibility for future growth [6] - The company will continue to collect and pay royalties and advertising payments during the bankruptcy process [6]