FAT Brands is now on a liquidating plan track after a sale process for substantially all assets, with disclosure-statement solicitation conditionally approved and a combined disclosure-statement/confirmation hearing set for July 24, 2026. The case began on January 26, 2026, when the company filed chapter 11 against a highly levered whole-business securitization structure: the first-day declaration described roughly $1.45 billion of funded debt, a management-fee model that did not cover corporate SG&A, more than $72 million of penalty interest and amortization since late 2022, defaults tied to the use of WBS collections for operations, and noteholder acceleration and foreclosure pressure after failed capital-raising efforts First Day DeclarationDkt. 15.
The early case was built around liquidity and control of collateral. FAT Brands first sought a short runway through cash collateral while pursuing mediation with the WBS noteholder group, but by March it moved for a larger DIP package split between FBG and Twin facilities, with about $76.9 million of new money and about $230.7 million of roll-up obligations, 12% PIK interest, priming liens, superpriority claims, adequate-protection packages, tight budget testing, and sale milestones running through early May DIP Financing MotionDkt. 454. The court later entered an interim order authorizing continued cash-collateral use and secured postpetition financing, including the FBG and Twin DIP facilities, replacement liens and superpriority adequate-protection claims, bi-weekly budget reporting, a June 2 challenge deadline, and a limited investigation budget .
The restructuring then shifted from operating-stabilization financing to asset disposition and estate wind-down. The disclosure statement says the debtors completed a competitive auction and obtained court approval on May 19, 2026 for four sale transactions to FBG Bid Co., TWNPKS Bid Co., Amazing Brands, LLC, and TABCO International, while a global settlement among the debtors, WBS Ad Hoc Group, 352 Capital, and the creditors' committee adds $9.23 million of cash for wind-down and tax liabilities Disclosure StatementDkt. 1435. The plan would establish a Liquidation Trust, distribute sale and retained-asset proceeds through a negotiated waterfall, allow noteholder deficiency claims at $445.9 million, allow Resid claims of at least $168.4 million, and leave intercompany, subordinated, and equity interests with no distribution Joint Plan of LiquidationDkt. 1434.
Near term, the case is in solicitation and confirmation mode. The June 2 order conditionally approving the disclosure statement authorizes solicitation of voting classes 3 through 8, sets June 15 as the voting record date, July 10 as the plan supplement deadline, July 17 at 4:00 p.m. CT as both the voting and combined objection deadline, and July 24 at 9:00 a.m. CT for the combined hearing on final disclosure-statement approval and plan confirmation Disclosure Statement Approval OrderDkt. 1436. The estates are also cleaning up executory-contract exposure, including a June 1 notice that designated contracts would be rejected effective June 1 absent timely objection Contract Rejection NoticeDkt. 1432.