Company: FAT Brands Inc.
Class Period: October 23, 2017 — August 24, 2018
Court: U.S.D.C. – Central District of California
Deadline: October 23, 2018
Kaskela Law LLC has filed a shareholder class action lawsuit against FAT Brands Inc. (NASDAQ: FAT) (“FAT Brands” or the “Company”) on behalf of investors who purchased or acquired the Company’s common stock pursuant and/or traceable to FAT Brand’s initial public offering (“IPO”) of common stock on or around October 23, 2017.
On or about October 23, 2017, FAT Brands completed its initial public offering (“IPO”) of common stock, selling shares to investors at $12.00 per share.
The complaint alleges that defendants failed to disclose, in connection with the IPO, that: (1) FAT Brands’ sales growth had significantly declined; (2) sales growth at Ponderosa & Bonanza was significantly below the level which FAT Brands had believed when it agreed to acquire those brands in March 2017; (3) the fast-casual dining sector was saturated and facing significant headwinds and a slowdown in growth, largely caused by customers fleeing to lower cost and quicker options; (4) FAT Brands’ free cash flow was less than its annual $5 million dividend obligations; (5) the Wiederhorn family planned to merge Fog Cutter Capital Group Inc. into FAT Brands following the IPO; and (6) Fog Cutter Capital and the Wiederhorn family that owned it had already once run Fog Cutter Capital/Fatburger into bankruptcy, resulting in its stock being delisted after attempting to go on an acquisition spree, much like the spree they were undertaking at FAT Brands at the time of the IPO.
The value of FAT Brands’ common stock significantly declined as the market learned the truth about the Company’s business metrics and financial prospects, which existed at the time of the IPO. FAT Brands’ common stock currently trades at approximately $8.00 per share, or approximately 25% lower than the price that the common stock was sold to investors less than one-year earlier in the IPO.
IMPORTANT DEADLINE: Investors who purchased FAT Brands’ common stock may, no later than October 23, 2018, seek to be appointed as a lead plaintiff representative of the investor class.
Investors who purchased the Company’s securities after October 23, 2017 and suffered a financial loss are encouraged to complete the information form on this page, or to contact Kaskela Law at (888) 715 – 1740 to discuss their important legal rights and recovery options.