Twin Hospitality Group: Chapter 11 and $413M Securitization Sale

Twin Hospitality Group Inc., the parent company of Twin Peaks and Smokey Bones restaurants, filed a chapter 11 petition on March 18, 2026, in the U.S. Bankruptcy Court for the Southern District of Texas (Case No. 26-90127). The filing was jointly administered under the lead case of its parent company, FAT Brands Inc. (Case No. 26-90126), which had filed on January 26, 2026 before Judge Alfredo R. Perez amid high debt and ongoing legal challenges. Twin Hospitality's formal entry into the case coincided with a $76.9 million new-money DIP facility, a mediation-driven governance settlement that sidelined CEO Andrew Wiederhorn, and an accelerated 363 sale process targeting an auction on April 28, 2026. The combined FAT Brands enterprise carries approximately $1.45 billion in whole business securitization debt across five silos, with Twin Hospitality's Twin Peaks and Smokey Bones brands collateralizing approximately $413 million of that total.

Debtor(s)	Twin Hospitality Group Inc. (jointly administered under FAT Brands Inc., et al.)
Court	U.S. Bankruptcy Court, Southern District of Texas (Houston Division)
Case Number	26-90127 (jointly administered under 26-90126)
Judge	Hon. Alfredo R. Perez
Petition Date	March 18, 2026 (Twin Hospitality); January 26, 2026 (FAT Brands)
DIP Facility	$307.6 million total ($76.9 million new money + $230.7 million roll-up across two tranches); UMB Bank, N.A. as agent; WBS Ad Hoc Group as lenders; 12% interest
Claims Agent	Omni Agent Solutions, Inc.

WBS Debt Structure and $72 Million Penalty Spiral

The FAT Brands enterprise funded its restaurant brand acquisitions through a series of whole business securitization transactions. Approximately $1.45 billion in fixed-rate WBS notes were outstanding across five special-purpose issuers as of the January 26, 2026 petition date, secured by substantially all revenue-generating assets of the securitization guarantors.

Twin Notes. The Twin Silo, most directly relevant to Twin Hospitality, consisted of approximately $413 million in notes issued by Twin Hospitality I, LLC, with UMB Bank, N.A. as trustee. The Twin Notes were structured across four tranches: $12 million in Class A-1 super senior notes at 9.00%, $266 million in Class A-2 senior secured notes at 9.00%, $57 million in Class B-2 senior subordinated notes at 10.00%, and $78 million in Class M-2 subordinated notes at 11.00%. FAT Brands held approximately $10 million in retained M-2 notes. The base indenture, dated November 21, 2024, carries a maturity date of October 26, 2054, and the notes are collateralized by substantially all assets of the Twin Securitization Guarantors, including profits from company-owned Twin Peaks and Smokey Bones restaurants and the brands themselves.

Other securitization silos. The remaining FAT Brands securitization debt was spread across four additional silos: Royalty Notes (~$212 million), GFG Notes (~$445 million), Fazoli's Notes (~$187 million), and Resid Notes (~$159 million). Each silo had its own issuer, trustee, and collateral pool.

Penalty interest and amortization. The WBS notes included ratcheting penalty interest and penalty amortization provisions. The First Day Declaration disclosed that the debtors had paid over $72 million in penalty interest and amortization since 2022. Management fees paid to the managers totaled approximately $17 million per year, against an approximately $96 million per year cost of providing management services to the securitization entities, leaving a structural deficit of approximately $79 million annually.

Non-securitization debt. In addition to the WBS notes, the enterprise carried approximately $4 million in Twin Peaks equipment loans, an $18.75 million Riverside refinancing loan secured by HDOS Acquisition assets, a $10 million Waterfall loan secured by 7.1 million shares of Twin Hospitality stock, and approximately $14.6 million in GFG and Royalty percent promissory notes.

Filing Triggers and Failed Out-of-Court Negotiations

The First Day Declaration attributed the filing to several converging pressures. The WBS notes' penalty interest provisions ratcheted debt service costs higher each quarter, while the management fee deficit drained operating liquidity. By the petition date, the debtors had exhausted their ability to incur additional debt, raise equity in public markets, or sell retained securitization notes after the trustees froze that avenue.

Without alternative funding sources, the debtors diverted certain WBS collections to fund operations rather than depositing them into the required securitization accounts, triggering events of default and manager termination events under the indentures. Reuters reported the filing was driven by debt burdens and legal challenges compounded by inflationary pressure and industry-wide headwinds.

Starting in summer 2025, the debtors engaged in out-of-court restructuring discussions with the WBS Ad Hoc Group, represented by White & Case LLP and Houlihan Lokey Capital, Inc. Those negotiations failed before the January 26, 2026 petition date. The Ad Hoc Group holds approximately 78.8% of the aggregate FBG and Twin prepetition notes and approximately 80.87% of the Twin Notes specifically.

Twin Hospitality's delayed filing. Twin Hospitality did not file its own petition until March 18, 2026 -- nearly two months after FAT Brands. The DIP motion explains that the debtors entered the chapter 11 cases with extremely limited liquidity and no committed debtor-in-possession financing. Twin Hospitality's formal inclusion as a named debtor was tied to its entry as a guarantor under the Twin DIP Facility.

Two-Tranche DIP Facility and Milestones

For the first 51 days of the case, the debtors operated on cash collateral alone under a series of five interim orders. The Fifth Interim Cash Collateral Order was entered on March 16, 2026. Two days later, on March 18, the debtors filed an emergency DIP motion seeking a two-tranche facility provided by members of the WBS Ad Hoc Group. Judge Perez entered an interim DIP order on March 19, 2026, with a final hearing scheduled for April 8.

FBG DIP Facility. The FAT Brands securitization tranche provided $46.0 million in new money commitments: $29.0 million available at interim order entry, $1.0 million at the final order and bidding procedures order, and $16.0 million at the bid deadline if a liquidity need existed. The FBG tranche also included a $138.0 million roll-up of Class A-2 notes at a 3:1 ratio ($87.0 million at interim, $3.0 million at final, $48.0 million at bid deadline). The borrowers were FAT Brands Royalty I, FAT Brands Fazoli's Native I, and FAT Brands GFG Royalty I.

Twin DIP Facility. The Twin Hospitality tranche provided $30.9 million in new money: $19.0 million at interim, $1.0 million at final/bidding procedures, and $10.9 million at the bid deadline if needed. The Twin tranche roll-up totaled $92.7 million of Twin Class A-2 notes at the same 3:1 ratio ($57.0 million at interim, $3.0 million at final, $32.7 million at bid deadline). Twin Hospitality I, LLC served as borrower, with FAT Brands and Twin Hospitality Group Inc. as guarantors.

Key terms. Both tranches carry 12.00% interest (14.00% default rate). The maturity date is the earliest of May 8, 2026 (extendable by lenders), acceleration on default, April 10, 2026 if the final order is not entered, denial of final order approval, a confirmed plan effective date, or closing of a sale transaction. The professional fee carve-out provides pre-trigger coverage for all accrued professional fees, with post-trigger amounts of $750,000 for debtor professionals (plus investment banker success fees), $250,000 for committee professionals, and $75,000 for a chapter 7 trustee.

DIP milestones. The facility imposes a compressed timeline: bidding procedures order by April 3, final DIP order by April 10, bid deadline April 24, auction April 28, sale hearing May 1, sale closing May 4, and maturity May 8. The interim order resolved weeks of financing uncertainty that had followed the initial FAT Brands petition without committed DIP financing.

DIP objections. Three parties objected to the DIP terms. 352 Capital GP LLC filed a limited objection related to its pending adversary proceeding (Case No. 26-03053) seeking to determine lien priority on FAT Brands and FB Resid Holdings assets. Pachulski Stang Ziehl & Jones LLP, serving as conflicts and mediation counsel, filed an opposition. Steptoe LLP, counsel to independent board members, joined in partial opposition. The court overruled the objections and granted the DIP on an interim basis on March 19, 2026.

Governance Settlement and $5 Million CEO Departure

The WBS Ad Hoc Group moved to appoint a chapter 11 trustee for the securitization debtors and filed an emergency motion to suspend CEO Andrew Wiederhorn. Lenders alleged Wiederhorn had misappropriated corporate funds to pay for personal travel and private jet use, according to Bloomberg. An investor group subsequently demanded his immediate suspension without pay after creditors alleged an unauthorized sale of Twin Hospitality stock shortly after the FAT Brands petition date. Judge Perez entered a stipulated mediation order on January 28, 2026, appointing Judge Marvin Isgur as mediator. The committee joined the mediation on February 13, and the mediation termination date was extended four times.

On March 11, 2026, Judge Isgur delivered a final mediation proposal that all parties accepted in principle. The resulting Amended and Restated Stipulation and Agreed Order was entered on March 19, 2026. QSR Magazine reported the governance settlement unlocked DIP financing and kept the auction for assets on track for April 28.

CEO departure payments. The governance settlement funds $5.0 million in total payments to Wiederhorn from DIP proceeds: $3.0 million on entry of the interim DIP order, followed by $500,000 installments on April 30, May 29, June 30, and July 31, 2026. In exchange, Wiederhorn takes a temporary leave of absence until the later of a sale closing or plan consummation.

Board reconstitution. Under the settlement terms, all non-Special Committee directors of FAT Brands and Twin Hospitality resigned effective on the settlement date. Sole management authority vested in the Special Committees and any new chapter 11 CEO selected by the Special Committees, subject to WBS Ad Hoc Group approval. The employment of three Wiederhorn family members -- Taylor, Thayer, and Mason Wiederhorn -- was terminated concurrently.

CEO permitted to bid. The governance settlement preserves Wiederhorn's right to bid for all or some of the debtors' assets on equal footing with third-party bidders, subject to confidentiality restrictions. The WBS Ad Hoc Group withdrew its trustee and CEO suspension motions on March 20, 2026, the day after the settlement was approved.

363 Sale Process and GLC Advisors

The debtors launched a formal marketing process on February 17, 2026, under the authority of the Special Committee, with support from the creditors' committee and the WBS Ad Hoc Group. GLC Advisors & Co., LLC was retained as investment banker effective as of the petition date.

The bidding procedures motion, filed March 12, 2026, seeks authority to sell all, substantially all, or any portion of the debtors' assets or brands. The sale process contemplates going-concern transactions, potentially through separate sales of different brand portfolios. No stalking horse bidder had been identified as of March 22, 2026. The companies were targeting a sale closing by early May to address liquidity constraints, according to Nation's Restaurant News. Franchise Times reported the process covers the full portfolio across more than 2,000 locations following the Nasdaq delistings of both FAT Brands and Twin Hospitality. Restaurant Dive reported that the sale process created uncertainty for the Twin Peaks and Smokey Bones franchise systems, with franchisees facing potential disruptions to marketing support and supply chain operations.

Deadline	Date
Bidding Procedures Order Entry	April 3, 2026
Stalking Horse Interest Deadline	April 3, 2026, 4:00 p.m. CT
Bid Deadline / Sale Objection Deadline	April 24, 2026, 4:00 p.m. CT
Auction	April 28, 2026, 9:00 a.m. CT
Sale Hearing	May 1, 2026
Sale Closing	May 4, 2026 (subject to regulatory/HSR approvals)

Restaurant closures. The debtors have been actively closing restaurants and rejecting leases throughout the case. Three omnibus lease rejection motions were filed by March 17, 2026, and a motion for restaurant closure and lease rejection procedures was filed on March 10, 2026. The Second Omnibus Lease Rejection Order was entered on March 18, 2026. Smokey Bones closed 14 locations without advance notice to customers in the weeks following the initial FAT Brands petition, according to PennLive.

Twin Hospitality's Public Stock and Postpetition Equity Raise

Twin Hospitality became a publicly traded company on January 29, 2025, when FAT Brands distributed approximately 5% of its fully diluted Class A Common Stock to FAT Brands shareholders. The stock began trading on Nasdaq under the symbol "TWNP," with FAT Brands retaining approximately 95% of Class A and 100% of Class B Common Stock.

Following the FAT Brands petition on January 26, 2026, Twin Hospitality's stock volume rose to 250 million shares on January 30, 2026, up from approximately 62,000 shares on the petition date. White Lion Capital, LLC purchased 9,000,000 shares for $3,104,200 (approximately $0.345 per share) under a common stock purchase agreement entered into in September 2025. The court approved the issuance and authorized use of the proceeds on February 27, 2026. The proceeds were held in a segregated account as unencumbered assets.

Twin Hospitality's common stock was delisted from Nasdaq effective February 4, 2026, and moved to the OTC Pink Limited Market.

Key Professionals and Insider Compensation

Debtor professionals. Latham & Watkins LLP serves as bankruptcy counsel, with Hunton Andrews Kurth LLP as local counsel. Huron Consulting Services LLC was retained as financial advisor, with John C. DiDonato designated as CRO and Abhimanyu Gupta as Deputy CRO. GLC Advisors & Co., LLC serves as investment banker. Moelis & Company LLC was retained as financial advisor and placement agent specifically for FAT Brands. Pachulski Stang Ziehl & Jones LLP serves as conflicts and mediation counsel, Steptoe LLP as counsel to independent board members, and BDO USA, P.C. as tax advisory services provider. Omni Agent Solutions, Inc. serves as claims, noticing, and solicitation agent.

Committee professionals. Paul Hastings LLP serves as counsel to the Official Committee of Unsecured Creditors, appointed by the U.S. Trustee on February 6, 2026. The firm confirmed its selection as committee counsel in a press release on February 18, 2026. M3 Partners, LP serves as committee financial advisor.

Ad hoc groups. The WBS Ad Hoc Group, holding approximately 78.8% of the aggregate securitization notes, is represented by White & Case LLP and Houlihan Lokey Capital. An Ad Hoc Group of Twin Peaks Franchisees, represented by Jarrod B. Martin of McGuireWoods, appeared in the case on February 25, 2026, and filed a Verified Statement pursuant to Bankruptcy Rule 2019.

Insider bonuses. On March 13, 2026, the debtors filed a motion to pay $414,349 in prepetition performance bonuses to four Twin Peaks executive insiders. The bonuses were earned under the 2025 Short-Term Incentive Plan, which allocated $1,587,980 across 52 Twin corporate employees; $1,173,631 had already been paid to 48 non-insider employees. The payments do not include any amounts to CEO Wiederhorn or his family members. The creditors' committee, the WBS Ad Hoc Group, and the U.S. Trustee all indicated they did not oppose the payments.

Key Timeline

The events below are drawn from the First Day Declaration, the Twin Hospitality emergency DIP motion, and the related interim DIP and governance orders.

Frequently Asked Questions

When did Twin Hospitality Group file for bankruptcy?

Twin Hospitality Group Inc. filed its own chapter 11 petition on March 18, 2026, in the Southern District of Texas. The case is jointly administered under the FAT Brands Inc. lead case (No. 26-90126), which was filed on January 26, 2026.

What brands does Twin Hospitality operate?

Twin Hospitality operates Twin Peaks, a polished casual dining sports bar concept with 35 company-owned and 79 franchised locations, and Smokey Bones, a full-service barbecue restaurant chain. The Twin Silo employs over 5,600 people directly.

How much debt does Twin Hospitality carry?

The Twin Notes total approximately $413 million across four tranches: Class A-1 (~$12 million), Class A-2 (~$266 million), Class B-2 (~$57 million), and Class M-2 (~$78 million). The notes are part of a broader $1.45 billion WBS structure across the FAT Brands enterprise.

What is the DIP financing structure?

The DIP has two tranches. The Twin tranche provides $30.9 million in new money and $92.7 million in roll-up of Class A-2 notes. The FBG tranche provides $46.0 million in new money and $138.0 million in roll-up. Both carry 12% interest with a May 8, 2026 maturity.

Who is the claims agent for Twin Hospitality Group?

Omni Agent Solutions, Inc. serves as the claims and noticing agent. The firm maintains the official claims register and distributes case notifications to creditors and parties in interest.

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