When corporations file for chapter, typically it is not as a result of they don’t seem to be money move constructive.
Bankruptcies can occur just because an organization cannot generate the money wanted to service its debt. In lots of circumstances, for those who took that debt away, the enterprise itself would truly achieve success.
That is the argument FAT Manufacturers CEO Andy Wiederhorn made on Jan. 12 on the ICR convention in Orlando.
“We have been speaking about restructuring this debt for 18 months to 2 years with our be aware holders,” Wiederhorn mentioned, based on Nation’s Restaurant Information. “It has not been a really constructive negotiation…We’re taking a look at avenues to decrease the debt and make it sensible. I want I may say that this might go rapidly and get resolved, however it could take a few rounds.”
The corporate warned late final 12 months that it might need to file for Chapter 11 chapter after a key lender known as its be aware. Wiederhorn’s feedback made it clear that the state of affairs is extra difficult than it seems on the floor.
FAT Manufacturers owns various big-name restaurant manufacturers, together with Johnny Rockets, Ponderosa Steakhouse, Nice American Cookie, and the Twin Peaks restaurant idea, which is owned by a subsidiary.
The corporate shared the main points of its newest monetary drawback in a 10-Ok submitting with the SEC.
“On November 25, 2025, FAT Manufacturers Inc. acquired a discover of acceleration (the “Acceleration Discover”) from UMB Financial institution, Nationwide Affiliation, as trustee below the Base Indenture, dated July 10, 2023 by and between the corporate’s subsidiary, FB Resid Holdings I, LLC FB Resid and UMB, referring to mounted charge secured notes issued by FB Resid. The Acceleration Discover acknowledged that UMB, pursuant to Part 9.2 of the FB Resid Indenture, performing on the route of the Controlling Class Consultant below the FB Resid Indenture, accelerates and declares the excellent principal quantity of the FB Resid Notes to be instantly due and payable,” the corporate wrote.
In sensible phrases, the submitting mentioned that UMB delivered to Fats Manufacturers a “Discover of Occasion of Default” with respect to the FB Resid Indenture, stating that an “Occasion of Default had occurred pursuant to Part 9.2 of the FB Resid Indenture. The combination principal quantity excellent below the FB Resid Notes is $158.9 million, or $110.0 million web of FB Resid Word,” it shared.
Comparable notices had been despatched to 4 different subsidiaries of FAT Manufacturers.
FAT Manufacturers has a sophisticated monetary construction.
“Whereas a trustee has declared FAT Manufacturers’ $1.26 billion in debt instantly due, Wiederhorn acknowledged on Tuesday that the debt will not be assured by the mother or father firm as a complete. As an alternative, the whole legal responsibility is unfold throughout 5 securitization trusts, entails a number of layers of buyers, and is tied to particular person manufacturers,” NRN reported.
That implies that it may, in concept, file for Chapter 11 chapter for components of the enterprise, however not all of it.
Wiederhorn, who was indicted by the U.S. authorities on cash laundering expenses, however had these expenses dismissed, defined throughout his remarks that “the debt restructuring course of has been difficult by the involvement of roughly 25 totally different buyers or be aware holders, who’ve been unable to agree on a single resolution,” based on NRN.
The corporate, he claimed, regardless of the $1.26 billion in debt, was “in good condition” with $60 million of free money move.
“We simply want the debt stack restructured to be reasonably priced,” Wiederhorn mentioned. “I feel that is a conclusion our be aware holders want to come back to sooner relatively than later.”
Fatburger: Signature burger chain and founding model of FAT Manufacturers
Johnny Rockets: Basic diner‑model burger and shake restaurant
Elevation Burger: Natural/higher‑burger idea
Fazoli’s: Italian fast‑service restaurant chain
Spherical Desk Pizza: Pizza chain with conventional and supply codecs
Nice American Cookies: Cookie and sweets franchise
Marble Slab Creamery: Premium hand‑combined ice cream franchise
Sizzling Canine on a Stick: Quick‑informal scorching canine and lemonade model
Pretzelmaker: Pretzel and snack model (typically co‑positioned with different ideas)
Buffalo’s Cafe & Categorical: Wings and American café idea
Hurricane Grill & Wings: A wing and grill chain
Native Grill & Wings: Regional wing and grill model (added in 2021)
Twin Peaks: A sports activities bar/lodge, informal eating, and bar chain
Smokey Bones Bar & Fireplace Grill: Barbecue/grill informal eating model (added in 2023)
Yalla Mediterranean: Mediterranean fast-casual model
Ponderosa Steakhouse & Bonanza Steakhouse: Household‑pleasant steakhouse chains
Supply: FAT Manufacturers web site
Having coated retail, eating places, and the inventory marketplace for 30 years, I’ve seen numerous public manufacturers wipe out shareholder fairness with a Chapter 11 chapter case.
Extra Chapter:
“An organization declares chapter as a result of it owes greater than it may pay. To extricate itself from this, it really works with banks and different collectors to create what might be considered a brand new firm that doesn’t owe as a lot cash. Nearly at all times, that firm is one which present shareholders received’t personal shares in,” Chris Stuttard, editor of BankruptcyData.com informed TheStreet.
“Our expertise is that you simply get little or no return on fairness after chapter,” he added.
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FAT Model’s CFO tried to place a constructive spin on the corporate’s third-quarter leads to its Q3 earnings launch.
“We’re implementing a number of strategic initiatives to strengthen our steadiness sheet. Our dividend pause stays in impact, preserving $35-$40 million in annual money move. We’re actively negotiating a debt restructuring with our noteholders,” he shared.
Complete income declined 2.3% to $140.0 million in comparison with $143.4 million within the fiscal third quarter of 2024.
Systemwide gross sales declined 5.5%.
Systemwide same-store gross sales declined 3.5%.
13 new shops had been opened throughout the fiscal third quarter of 2025.
Web loss was $58.2 million, or $3.39 per diluted share, in comparison with $44.8 million, or $2.74 per diluted share, within the fiscal third quarter of 2024.
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This story was initially revealed by TheStreet on Jan 13, 2026, the place it first appeared within the Eating places part. Add TheStreet as a Most well-liked Supply by clicking right here.