FAT Brands reaches settlement in stockholder derivative lawsuits

FAT Brands Inc. (NASDAQ: FAT) announced it has entered into a settlement agreement to resolve two stockholder derivative lawsuits pending in Delaware's Court of Chancery. The lawsuits were filed against certain current and former directors and officers of the company.

The derivative claims were filed in June 2021 relating to the company's December 2020 merger with Fog Cutter Capital Group, and in March 2022 concerning the company's June 2021 recapitalization.

Under the proposed settlement terms, the company's board of directors agreed to adopt certain corporate governance modifications. The company's insurers will pay $10 million to the company, with plaintiffs' counsel fees and expenses to be deducted from this amount. Fog Cutter Holdings LLC will contribute 200,000 shares of Twin Hospitality Group Inc. (NASDAQ: TWNP) to the company.

The settlement resolves all claims against the named defendants without any admission of liability or wrongdoing by them or the company. The agreement requires approval from the Court of Chancery and non-objection by the United States.

FAT Brands operates as a global franchising company that owns 18 restaurant brands including Round Table Pizza, Fatburger, Johnny Rockets, and Fazoli's. The company franchises and owns over 2,300 units worldwide.

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