FAT Brands (NASDAQ: FAT) details $10M derivative case settlement package

Rhea-AI Filing Summary

FAT Brands Inc. has entered into a proposed settlement to resolve two stockholder derivative lawsuits in the Delaware Court of Chancery related to its December 2020 merger with Fog Cutter Capital Group and its June 2021 recapitalization. The settlement resolves all claims against the company and its current and former directors and officers without any liability or wrongdoing attributed to them personally or to the company.

Under the terms, the board has agreed to adopt and implement specified corporate governance modifications. In addition, the company’s insurers will pay $10 million to FAT Brands, from which plaintiffs’ attorneys’ fees and expenses will be deducted, and Fog Cutter Holdings LLC will contribute 200,000 shares of Twin Hospitality Group Inc. to the company. The Delaware Court of Chancery must approve the settlement before the claims are dismissed.

Insights

Equity & governance analyst

FAT Brands moves to settle legacy derivative suits with cash and governance changes.

FAT Brands Inc. has agreed to settle two long-running stockholder derivative actions tied to its 2020 merger with Fog Cutter Capital Group and 2021 recapitalization. The settlement would dismiss all claims against current and former directors and officers and the company, with the agreement explicitly stating that no liability or wrongdoing is attributed to them.

The package includes corporate governance modifications to be adopted by the board, which may address issues raised by stockholders around oversight and process. Financially, the terms provide for a $10 million payment from the company’s insurers to FAT Brands, net of plaintiffs’ counsel fees and expenses, plus a contribution of 200,000 Twin Hospitality Group Inc. shares from Fog Cutter Holdings LLC.

The settlement remains subject to approval by the Delaware Court of Chancery. If approved, it would remove this litigation overhang and finalize the related governance commitments, with the economic benefit to FAT Brands depending on net insurance proceeds and the value of the Twin Hospitality Group shares.

8-K Event Classification

2 items: 8.01, 9.01

2 items

Item 8.01 Other Events Other

Voluntary disclosure of events the company deems important to shareholders but not covered by other items.

Item 9.01 Financial Statements and Exhibits Exhibits

Financial statements, pro forma financial information, and exhibit attachments filed with this report.

Understanding 8-K Material Events →

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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): October 9, 2025

FAT Brands Inc.

(Exact name of Registrant as Specified in Its Charter)

Delaware		001-38250		82-1302696
(State or Other Jurisdiction of Incorporation)		(Commission File Number)		(IRS Employer Identification No.)

9720 Wilshire Blvd., Suite 500 Beverly Hills, CA		90212
(Address of Principal Executive Offices)		(Zip Code)

Registrant’s Telephone Number, Including Area Code: (310) 319-1850

Not Applicable

(Former Name or Former Address, if Changed Since Last Report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instructions A.2. below):

☐	Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
☐	Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
☐	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
☐	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:

Title of each class		Trading Symbol(s)		Name of each exchange on which registered
Class A Common Stock		FAT		The Nasdaq Stock Market LLC
Class B Common Stock		FATBB		The Nasdaq Stock Market LLC
Series B Cumulative Preferred Stock		FATBP		The Nasdaq Stock Market LLC

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§ 230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§ 240.12b-2 of this chapter).

Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Item 8.01 Other Events.

On August 1, 2025, FAT Brands Inc. (the “Company”) and certain of its current and former directors and officers entered into a settlement agreement with stockholders of the Company to resolve two lawsuits brought derivatively on behalf of the Company in the Delaware Court of Chancery (the “Derivative Actions”). The Derivative Actions were filed in June 2021 (Case No. 2021-0511-NAC, relating to the Company’s December 2020 merger with Fog Cutter Capital Group), and March 2022 (Case No. 2022-0254-NAC, relating to the Company’s June 2021 recapitalization). The settlement agreement will resolve all claims asserted against the defendants in the Derivative Actions without any liability or wrongdoing attributed to them personally or the Company. Under the terms of the settlement agreement, the Company’s Board of Directors agreed to adopt and implement certain corporate governance modifications. In addition, the Company’s insurers will pay to the Company $10 million, from which fees and expenses of plaintiffs’ counsel will be deducted, and Fog Cutter Holdings LLC will contribute 200,000 shares of Twin Hospitality Group Inc. to the Company.

The Delaware Court of Chancery must approve the settlement of the Derivative Actions. Assuming that the settlement terms are approved, as a result of the settlement, all of the claims asserted in the Derivative Actions will be dismissed. A copy of the Notice of Pendency of Settlement of Derivative Actions is included as Exhibit 99.1 to this Current Report.

Item 9.01. Financial Statements and Exhibits.

(d) Exhibits.

Exhibit No.		Description
99.1		Notice of Pendency of Settlement of Derivative Actions
104		Cover Page Interactive Data File (embedded within the Inline XBRL document)

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

Date: October 9, 2025

	FAT Brands Inc.
	By:	/s/ Kenneth J. Kuick
		Kenneth J. Kuick
		Chief Financial Officer

FAQ

What did FAT Brands Inc. (FAT) disclose in this 8-K?

FAT Brands Inc. disclosed that it entered into a settlement agreement to resolve two stockholder derivative lawsuits in the Delaware Court of Chancery related to its December 2020 merger with Fog Cutter Capital Group and its June 2021 recapitalization.

How much will FAT Brands receive under the settlement?

Under the settlement terms, FAT Brands’ insurers will pay $10 million to the company, from which plaintiffs’ counsel’s fees and expenses will be deducted.

What non-cash consideration is included in the FAT Brands settlement?

Fog Cutter Holdings LLC will contribute 200,000 shares of Twin Hospitality Group Inc. to FAT Brands as part of the settlement package.

Does the FAT Brands settlement involve an admission of wrongdoing?

The settlement resolves all claims against the defendants without any liability or wrongdoing attributed to the individual directors and officers or to FAT Brands Inc.

What corporate governance changes are part of the FAT Brands settlement?

FAT Brands’ Board of Directors agreed to adopt and implement specified corporate governance modifications, although the detailed terms are referenced generally rather than itemized in this summary.

Is the FAT Brands derivative settlement final?

No. The settlement must be approved by the Delaware Court of Chancery. If approved, all claims asserted in the derivative actions will be dismissed.

Which lawsuits are being settled by FAT Brands?

The settlement covers two derivative actions filed in June 2021 (Case No. 2021-0511-NAC, tied to the December 2020 merger) and March 2022 (Case No. 2022-0254-NAC, tied to the June 2021 recapitalization) in the Delaware Court of Chancery.