RM LAW, P.C. announces that a class action lawsuit has been filed on behalf of all persons or entities that purchased FAT Brands Inc. (“FAT Brands” or the “Company”) (NASDAQ: FAT) pursuant and/or traceable to the Company’s registration statement and prospectus (collectively, the “Registration Statement”) issued in connection with the Company’s October 23, 2017 initial public offering (“IPO” or the “Offering”) (the “Class Period”).
FAT shareholders may, no later than October 23, 2018, move the Court for appointment as a lead plaintiff of the Class. If you purchased shares of FAT and would like to learn more about these claims or if you wish to discuss these matters and have any questions concerning this announcement or your rights, contact Richard A. Maniskas, Esquire toll-free at (844) 291-9299 or to sign up online, click here.
On or about October 23, 2017, FAT Brands completed its 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.
If you are a member of the class, you may, no later than October 23, 2018, request that the Court appoint you as lead plaintiff of the class. A lead plaintiff is a representative party that acts on behalf of other class members in directing the litigation. In order to be appointed lead plaintiff, the Court must determine that the class member’s claim is typical of the claims of other class members, and that the class member will adequately represent the class. Under certain circumstances, one or more class members may together serve as “lead plaintiff.” Your ability to share in any recovery is not, however, affected by the decision whether or not to serve as a lead plaintiff. You may retain RM LAW, P.C. or other counsel of your choice, to serve as your counsel in this action.