This story was originally published on Restaurant Dive. To receive daily news and insights, subscribe to our free daily Restaurant Dive newsletter. Fat Brands’ creditors went on the offense earlier this month after finding out that the bankrupt company sold $3 million of Twin Hospitality stock to a shareholder. While the sale began prior to the chain’s bankruptcy filing, it went through Jan. 30 without court approval. This poses a problem for Fat Brands, as creditors called out CEO Andy Wiederhorn and sai ...

Bankruptcy Trends - Corporate bankruptcies in the US have reached levels not seen since the Great Recession, with at least 717 companies filing for bankruptcy through November 2025, marking a 14% increase from the previous year and the highest total since 2010 [1] Affected Companies - Notable bankruptcies include pharmacy chain Rite Aid, genetics testing firm 23andMe, fast-casual dining spot Hooters, and no-frills carrier Spirit Airlines [2] Driving Factors - The surge in bankruptcies is attributed to a combination of persistent cost pressures, tight credit conditions, and aggressive trade policies that have increased the price of imported materials and disrupted global supply chains [3][11] - Industrial companies are experiencing the most significant distress, a shift from previous years when consumer retailers dominated bankruptcy filings [4] Sector Analysis - Manufacturers, construction firms, and transportation providers now represent the largest share of new bankruptcy filings, contrasting with recent trends where consumer-facing companies were more prevalent [4] - The manufacturing sector lost over 70,000 jobs in the year ending in November, despite claims that tariff strategies would boost domestic production [4] Consumer Behavior - Consumer-facing companies selling discretionary goods are also facing increased bankruptcy filings, indicating that inflation is causing Americans to reduce nonessential spending [8] - Retailers in sectors like fashion and home décor are particularly vulnerable as consumers prioritize essential expenses [8] Bankruptcy Types - The filings include both Chapter 11 reorganizations, which allow companies to restructure while operating, and Chapter 7 liquidations, which typically result in shutdowns and asset sales [9] Mega Bankruptcies - There has been a notable increase in "mega bankruptcies," with 17 companies having more than $1 billion in assets filing for bankruptcy in the first half of 2025, the highest in any six-month period since the COVID-19 crisis [10] Tariff Impact - Tariffs on steel, components, and energy-related equipment have severely impacted manufacturers and suppliers, with effective tariff rates on imported solar cells and panels rising to about 20% from less than 5% in prior years [15] - Smaller companies are particularly strained by these tariffs, which have led to significant cash flow issues [16] Specific Company Cases - Solar installer PosiGen filed for Chapter 11 in November due to the rollback of federal clean-energy incentives and new tariffs on imported solar equipment [12] - Electric truck maker Nikola filed for Chapter 11 in February after struggling with production scaling and costs related to a battery recall, alongside facing a $125 million civil penalty from the SEC [17]

Core Viewpoint - Fat Brands is facing a significant financial crisis due to a cash crunch and demands from lenders for immediate loan repayment, which may lead to a bankruptcy filing [2][3]. Group 1: Financial Issues - Fat Brands has received a notice of acceleration from UMB Bank regarding fixed rate secured notes, indicating that the outstanding principal amount of $158.9 million is now due [4][5]. - The company has acknowledged an "Event of Default" related to its subsidiary FB Resid, which is part of the ongoing financial troubles [5][6]. - A previous default notice was sent to four other subsidiaries of Fat Brands, highlighting a broader issue within the company's financial structure [6]. Group 2: Company Background - Fat Brands owns several restaurant brands, including Johnny Rockets, Hot Dog On a Stick, and Fatburger, among others [2]. - The company had previously issued a going concern report to the SEC, indicating serious doubts about its ability to continue operations without restructuring [2].

Core Insights - Jaiprakash Gaur's flagship company, Jaiprakash Associates Ltd, has been admitted into insolvency due to overwhelming debt of ₹57,000 crore, marking a significant downfall for the once-prominent entrepreneur [1][2]. Company Background - Jaiprakash Gaur, born in 1931, transitioned from a government job to entrepreneurship in 1958, establishing Jaiprakash Associates and gaining a reputation through major projects like the Tehri Dam and Vishnuprayag Hydel Project [3][4]. - The liberalization of the Indian economy in 1991 allowed Jaiprakash Associates to expand into various sectors, including cement and real estate, with revenues reaching over ₹20,000 crore [5][6]. Growth and Challenges - The company’s rapid growth was fueled by heavy borrowing, relying on future cash flows and asset sales for repayment, which was sustainable during periods of high economic growth [6]. - However, the company faced a downward spiral due to slowing growth, project delays, regulatory issues, and a changing real estate market, leading to significant financial distress [7][8]. Recent Developments - Despite attempts to sell assets to reduce debt, including cement plants and hydropower projects, the financial situation worsened, culminating in insolvency petitions filed by major banks in June 2024 [9]. - The Noida real estate market, which had previously contributed to the company's decline, is now experiencing a boom due to the upcoming Jewar Airport, highlighting a stark contrast to the company's struggles [10]. Leadership Transition - Gaur stepped back from daily operations in 2010, passing leadership to his son, Manoj Gaur, who now faces scrutiny over financial irregularities linked to stalled projects [11]. Conclusion - In October, creditors accepted a bid from Adani Enterprises for Jaiprakash Associates' assets, marking a bitter end to Gaur's legacy as his empire transitions to new ownership [12].

Core Insights - U.S. fashion and footwear firms are performing relatively well compared to other sectors in terms of corporate bankruptcies [1] Bankruptcy Statistics - In 2025, only two fashion firms, Claire's Holdings LLC and F21 OpCo LLC, filed for bankruptcy with liabilities exceeding $1 billion, out of a total of 26 firms in various sectors [2] - The healthcare and information technology sectors have seen a higher number of bankruptcies, while other consumer discretionary firms like At Home Group Inc. and Joann Inc. were not in apparel or footwear [2] Reorganization vs. Liquidation - The third quarter saw a 23% increase in bankruptcy reorganizations, totaling 137, while liquidations decreased by over 9% to 69 [3] - Claire's managed to avoid liquidation by selling assets for $140 million, resulting in the closure of 300 stores but preserving 960 locations [4] Overall Bankruptcy Trends - The total number of large bankruptcies is on track to reach the highest level since 2010, with 582 cases filed through September [5] - The S&P report attributes the rise in bankruptcies to overleveraged firms facing macroeconomic challenges, particularly in refinancing low-interest debt amid high interest rates [7] Specific Company Bankruptcies - Notable bankruptcies in the footwear sector include Soleply, Amiga Shoes, and CaaStle, with the latter two filing for Chapter 7 liquidation [6]

Corporate Bankruptcy Trends - Corporate bankruptcies in 2025 have reached the highest level since 2010, following the Great Financial Crisis [1][3] - As of July 2025, there have been 446 large corporate bankruptcies, defined as public companies with at least $2 million in debt or private companies with at least $10 million in assets or liabilities [1][3] - The increase in bankruptcies is linked to the rate hike cycle in 2022 and 2023 [3] Contributing Factors to Bankruptcies - Artificially suppressed interest rates at zero for an extended period allowed companies to raise excessive capital, delaying inevitable bankruptcies [6][7] - The lack of "creative destruction" in American company formation since the GFC has led to a backlog of companies that should have failed [9][10] - Relaxed constraints on M&A activity may lead to more aggressive acquisitions of assets from floundering businesses, contributing to bankruptcies [12][13] - Increased competition from unexpected companies is putting pressure on various business categories [14] Retail Sector Vulnerability - Retail businesses with physical locations are particularly vulnerable due to the leverage associated with long-term leases, which are akin to debt [18][19] - Macro trends of declining foot traffic to physical locations, influenced by companies like Amazon and Shein, exacerbate the challenges for retailers [18] Commercial Real Estate Debt Crisis - Approximately $2.2 trillion of commercial real estate (CRE) debt is maturing before 2028, posing refinancing challenges [24] - Higher interest rates and declining real estate valuations are making it difficult for developers to refinance debt, potentially leading to foreclosures [26][27] - Banks are hesitant to foreclose on commercial real estate due to the negative impact on their balance sheets, leading to restructuring efforts [24] - Traditional office construction is facing headwinds as financing flows shift towards data centers, further straining the commercial real estate sector [30]