FAT Brands Inc. Reaches Agreement in Principle to Settle Class Action Litigation
11 August 2022 - 7:02AM
FAT (Fresh. Authentic. Tasty.) Brands Inc. (NASDAQ: FAT) (the
“Company”) announced today that it has reached an agreement in
principle to settle the consolidated securities class action
lawsuit captioned In re FAT Brands Inc. Securities Litigation, Case
No. 2:22-cv-01820-MCS-RAO (C.D. Cal.), pending against the Company
and certain of its current and former officers and directors in the
U.S. District Court for the Central District of California. The
consolidated class action complaint was filed in March 2022, as
described in the Company’s Annual Report on Form 10-K filed with
the Securities and Exchange Commission on March 23, 2022. The
agreement to settle the lawsuit was reached following a voluntary
mediation process.
The agreement in principle contemplates a cash
payment by the Company of $2.5 million and issuance of $500,000 in
Class A common stock to settle the claims brought on behalf of all
persons who purchased or otherwise acquired FAT Brands securities
between December 4, 2017 and February 18, 2022. The parties have
agreed to negotiate in good faith to execute a definitive
stipulation of settlement and related documents to be filed with
the court. The Company anticipates that the stipulation of
settlement will provide a full release of all claims by the
settlement class members against all defendants, including the
Company and the named officers and directors, and will expressly
deny any liability, wrongdoing or responsibility by any of the
defendants. The Company anticipates that, upon final court approval
of the settlement, the litigation will be dismissed with prejudice.
Approval by the court, notice to the putative class, and the
satisfaction of customary conditions to effectiveness may take
several months.
While FAT Brands continues to deny liability, it
also believes that eliminating the distraction, expense and risk of
continued litigation is in the best interests of the Company and
its stockholders.
As previously disclosed, given the uncertainties
of litigation, the Company had not been in a position to assess the
likelihood of any potential loss or outcome of the complaint. As a
result of the entry into the agreement in principle, the Company
expects that the above-referenced settlement will be included in
its results of operations and financial condition for the fiscal
quarter ending September 25, 2022.
###
About FAT (Fresh. Authentic. Tasty.)
Brands FAT Brands Inc. (NASDAQ: FAT) is a leading global
franchising company that strategically acquires, markets, and
develops fast casual, quick-service, casual dining, and
polished casual dining concepts around the world. The Company
currently owns 17 restaurant brands: Round Table Pizza, Fatburger,
Marble Slab Creamery, Johnny Rockets, Fazoli’s, Twin Peaks, Great
American Cookies, Hot Dog on a Stick, Buffalo’s Cafe & Express,
Hurricane Grill & Wings, Pretzelmaker, Elevation Burger, Native
Grill & Wings, Yalla Mediterranean and Ponderosa and Bonanza
Steakhouses, and franchises and owns over 2,300 units worldwide.
For more information on FAT Brands, please
visit www.fatbrands.com.
Forward Looking Statements
This news release contains forward-looking
statements within the meaning of certain securities laws, including
the Private Securities Litigation Reform Act of 1995,
including statements regarding the agreement in principle to settle
the pending class action lawsuit, the Company’s expectations
regarding the likelihood, terms, conditions and timing of the
anticipated settlement, and other statements that are not purely
historical facts. These statements involve substantial risks and
uncertainties, including, among others, risks and uncertainties
associated with negotiating final terms of the settlement
agreement, obtaining court approval of the proposed settlement, the
number of purported class members who may opt-out of the proposed
settlement, whether any proposed settlement is appealed, and the
timing of the settlement payment. There can be no assurance that
the litigation will be finally resolved in accordance with the
agreement in principle or at all. For a further description of the
risks and uncertainties relating to the business of the Company in
general, see the Company’s filings with the Securities and Exchange
Commission, including the Company’s Annual Report on Form 10-K and
Quarterly Reports on Form 10-Q. All of these factors should be
considered carefully and readers should not place undue reliance on
the Company’s forward-looking statements. Any forward-looking
statements are made only as of the date hereof and the Company has
no intention and undertakes no obligation to update or revise any
of them, except as required by law.
MEDIA CONTACT:Erin
Mandzik, FAT Brandsemandzik@fatbrands.com 860-212-6509
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