Fat Brands’ bank declared another sizable amount of the company’s debt — roughly $169 million — to be payable in full and immediately on Nov. 25, following Fat’s default on its obligations earlier this year, according to a filing with the U.S. Securities and Exchange Commission.
The declaration applies to debt incurred by one of Fat’s subsidiaries, FB Resid, and comes about a week after a similar declaration about four of Fat’s other subsidiaries.
“FB Resid does not currently have amounts on hand to pay such principal and interest, and such acceleration or any subsequent foreclosure may materially and adversely affect the business, financial condition and liquidity of FB Resid, as well as that of [Fat Brands],” the filing said.
The pressure on Fat to pay down more than $1 billion in debt is intensifying. When Fat Brands’ creditors called in the bulk of its loans last month, the company cautioned that it lacked the liquidity to meet the demands and risked bankruptcy. At the time, Fat said it has been negotiating with its creditors about restructuring or refinancing its obligations.
The company accrued the debt through a run of acquisitions that began in 2019. It spun off Twin Hospitality in January to help pay down this debt.
James Ellis, one of the board members at Twin Hospitality, Fat’s publicly traded casual dining spin-off, announced his departure from the company also on Nov. 25. , Ellis’ departure was due to personal reasons and was unrelated to “any matter relating to the Company’s operations, policies or practices,” according to the filing.
