According to the Complaint, FAT Brands, Inc. ("FAT Brands" or the "Company") is a multi-brand franchising company that acquires, markets, and develops fast casual and causal dining restaurant concepts including Fatburger, Buffalo’s Café, Buffalo’s Express, Ponderosa Steakhouse, and Bonanza Steakhouse.
Plaintiff's law firm issued a press release announcing the law suit. According to the press release, the Complaint alleges that during the Class Period, Defendants made materially false and/or misleading statements and/or failed to disclose 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) certain individual Defendants planned to merge Fog Cutter Capital Group Inc. into FAT Brands following the IPO; (6) Fog Cutter Capital and certain individual Defendants 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; and (7) as a result, FAT Brands’ public statements were materially false and misleading at all relevant times.
On November 16, 2018, the Court issued an Order appointing Lead Plaintiffs and Counsel. On January 15, 2019, Lead Plaintiffs filed an amended Complaint. Defendants filed a Motion to Dismiss the amended Complaint on March 19. On June 14, the Court issued an Order granting Defendants' Motion to Dismiss. Plaintiffs were given leave to amend the Complaint. On August 5, Lead Plaintiffs filed a second amended Complaint. Defendants filed a Motion to Dismiss the second amended Complaint on September 9. On December 17, the Court issued an Order granting in part and denying in part Defendants' Motion to Dismiss. On December 27, Plaintiffs filed a Motion for Class Certification. The Court denied Certification of the Class on March 13, 2020. On October 9, Lead Plaintiffs settled their individual claims with certain Defendants and voluntarily dismissed the action with prejudice.