SAN FRANCISCO, July 10, 2024 (GLOBE NEWSWIRE) — Hagens Berman challenges FAT Brands Inc. (NASDAQ: FAT, FATBB, FATBP, FATBW) Investors who have suffered significant losses can now take action and report their losses here.
Class Action Lawsuit against FAT Brands Inc.:
A class action lawsuit has been filed by investors against FAT Brands Inc. (FAT, FATBB, FATBP, FATBW), accusing the company of making misleading statements and failing to disclose important information. The lawsuit centers on the actions of Andrew A. Wiederhorn, the current chairman and former CEO of FAT Brands.
Background:
In the past, FAT Brands assured investors of its cooperation with the U.S. Department of Justice (DOJ) and the Securities and Exchange Commission (SEC) in their investigations of the company’s transactions with Wiederhorn, including matters related to compensation, loan extensions and other benefits that Wiederhorn and his family received from the company. FAT Brands emphasized that its financial statements were accurate and its internal controls over financial reporting were adequate.
The charges:
However, on May 9, 2024, the Justice Department escalated the situation by issuing a grand jury indictment against several key figures. The indictment specifically targets FAT Brands, Wiederhorn, tax consultant William J. Amon, and FAT Chief Financial Officer Rebecca D. Hershinger. According to the allegations, Wiederhorn orchestrated the extension, maintenance, and forgiveness of approximately $47 million in compensation to himself through what authorities describe as sham shareholder loans. Both Wiederhorn and Amon were allegedly aware that these transactions were in fact disguised compensation.
Board dynamics:
In addition, the indictment sheds light on the actions of FAT Brands’ board members. After learning of the federal investigation on December 1, 2021, some board members reportedly communicated with the government. Subsequently, on March 28, 2023, Wiederhorn made significant changes to the composition of the board. He fired all board members except himself and filled the board with mostly non-independent directors under his control.
Following this news, the prices of FAT Brands’ Class A and Class B shares, Series B preferred stock, and warrants plummeted on May 10, 2024.
“At the heart of our investigation is the extent to which FAT understated its compensation costs and overstated its profit metrics,” said Reed Kathrein, lead partner at Hagens Berman, who led the investigation.
If you have invested in FAT and suffered significant losses or have knowledge that could help the company’s investigation, report your losses now »
If you would like more information and answers to frequently asked questions about the FAT case and our investigation, read on »
About Hagens Berman
Hagens Berman is a global complex plaintiffs’ rights litigation firm with a focus on corporate responsibility. The firm has a robust practice representing investors as well as whistleblowers, employees, consumers and others in cases that achieve real results for those harmed by corporate negligence and other wrongdoing. Hagens Berman’s team has won more than $2.9 billion in this area of law. For more information about the firm and its successes, visit hbsslaw.com. Follow the firm for updates and news at @ClassActionLaw.
Contact:
Reed Kathrein, 844-916-0895
