FAT Brands Inc. is now in the confirmation phase of a liquidation restructuring, having completed a court-authorized sale of substantially all assets and filed solicitation versions of a Joint Plan of Liquidation and accompanying Disclosure Statement in late June 2026.
The multi-brand restaurant franchisor — operator of 18 brands including Round Table Pizza, Fatburger, Johnny Rockets, Twin Peaks, and Smokey Bones across roughly 2,200 locations — filed for chapter 11 on January 26, 2026 (Voluntary PetitionDkt. 1) in the Southern District of Texas before Judge Alfredo R. Perez. The filing followed a structural liquidity breakdown in the company's five whole-business securitization programs: roughly $1.45 billion of funded debt sat in fixed-rate securitization notes while the management-fee stream (about $1.5 million per month) could not cover corporate overhead (about $8 million per month). The pressure intensified in November 2025 when UMB Bank, as trustee, demanded full repayment after missed quarterly bond payments, and the Debtors entered the case with only about $2.1 million of unrestricted cash and roughly $19.9 million of restricted cash (First Day Declaration of CRO John DiDonatoDkt. 15).
To stabilize operations, the Debtors sought combined cash-collateral use and secured postpetition financing through two UMB Bank-administered facilities — the FBG DIP and the Twin DIP — totaling roughly $307.6 million in commitments ($76.9 million of new money plus a 3:1 roll-up of prepetition debt) at 12.00% PIK with a 14.00% default rate (Emergency Motion for DIP and Cash CollateralDkt. 454). The court entered interim authority in April 2026 (), with the package ultimately moving to final approval in May 2026. The financing drew early opposition: 352 Capital GP LLC, holder of roughly 65% of the approximately $159 million Resid Notes and Controlling Class Representative, filed a separate adversary complaint seeking declaratory relief on whether postpetition management fees and residuals are estate property or collateral subject to its prepetition interest under Section 552(a) ().
With liquidity resolved and the sale process concluded, the Debtors pivoted to a wind-down. On June 22, 2026 they filed the solicitation Joint Plan of Liquidation (Chapter 11 PlanDkt. 1513) and Disclosure Statement (Disclosure StatementDkt. 1514), and noticed the solicitation versions the same day (Solicitation NoticeDkt. 1515). The plan establishes a Liquidation Trust — funded in part by a $9.23 million wind-down contribution from the WBS Ad Hoc Group — to pursue retained causes of action and distribute sale proceeds, while allowing noteholder deficiency claims of approximately $445.9 million and Resid deficiency claims exceeding $157 million. Andrew Wiederhorn and his affiliates are carved out of the plan releases. The voting deadline is July 17, 2026, with a confirmation hearing scheduled for July 27, 2026.
