FAT Brands is Leaving the Stock Market: Bankruptcy Process Has Started

FAT Brands with 2,200 Restaurants Worldwide

FAT Brands is a franchising giant known for managing popular brands with over 2,200 fast food restaurants worldwide. However, the company has faced significant financial difficulties, resulting in its removal from the Nasdaq stock exchange.

Why is it Being Removed from Nasdaq?

FAT Brands announced to the U.S. Securities and Exchange Commission (SEC) that the decision to be removed from Nasdaq was made due to its bankruptcy filing, significant weaknesses in its equity structure, and uncertainties regarding the sustainability of its stock listing criteria. The company announced that it received an official notification from Nasdaq earlier in the week and noted that trading of its shares would be halted as of February 4.

The Future of the Shares

With the termination of its Nasdaq listing, FAT Brands' shares are expected to trade under the Pink Limited Market within the OTC Markets Group. However, the limited trading volume and transparency of this market are considered factors that increase the risk of volatility in the shares. The company had previously come under scrutiny from Nasdaq, as the share value remained below 1 dollar for 30 business days, and the market value of Class A shares fell below 35 million dollars, while Class B shares dropped below 1 million dollars, indicating violations of listing rules.

The Company’s Debt Restructuring Efforts

Recently, FAT Brands, which has an aggressive growth policy and a debt burden exceeding 1.3 billion dollars, sought bankruptcy protection to restructure its debts. Founded in 2017, the company manages a wide portfolio with brands such as Fatburger, Johnny Rockets, Twin Peaks, Great American Cookies, Round Table Pizza, and Fazoli’s.