Fat Brands receives notice of debt acceleration and board resignation

Fat Brands Inc. (NASDAQ:FAT) reported that on November 25, 2025, it received a notice of acceleration from UMB Bank, the trustee under the FB Resid Indenture, relating to fixed rate secured notes issued by its subsidiary, FB Resid Holdings I, LLC. According to a statement released in a recent SEC filing, UMB, acting at the direction of the controlling class representative, declared the outstanding principal and accrued interest on the FB Resid Notes immediately due and payable.

The filing states that the aggregate principal amount outstanding under the FB Resid Notes is $158.9 million, or $110 million net of notes retained by the company. Accrued and unpaid interest as of the report date is approximately $9.9 million. FB Resid does not currently have sufficient funds to pay these amounts.

The FB Resid Notes are secured by a security interest in monthly management fees and residual amounts payable to Fat Brands by certain affiliates, as well as by 44,638,745 shares of Class A Common Stock of Twin Hospitality Group Inc. These shares represent about 22.5% of the voting control of Twin Hospitality Group Inc. and have been pledged to UMB as trustee. Due to the current event of default, UMB may be entitled to exercise voting control over these pledged shares and direct their sale or other disposition.

The company disclosed that the acceleration or any subsequent foreclosure may materially affect the business, financial condition, and liquidity of FB Resid and Fat Brands, and could result in FB Resid, the company, or certain subsidiaries seeking to reorganize through bankruptcy proceedings.

Separately, Fat Brands announced that on November 25, 2025, James Ellis resigned as a director of both Fat Brands and its subsidiary, Twin Hospitality Group Inc., effective immediately. The company stated that Mr. Ellis’s resignation was due to personal reasons and not due to any disagreement with the company’s operations, policies, or practices.

All information is based on a statement released in a recent SEC filing.

In other recent news, FAT Brands Inc. reported a net loss of $58.2 million for the third quarter of 2025, equating to a loss of $3.39 per diluted share, which did not meet analysts’ projections of a $1.96 per share loss. The company’s total revenue for the quarter was $140 million, representing a 2.3% decrease compared to the previous year. FAT Brands also disclosed receiving acceleration notices for $1.26 billion in securitized notes, requiring immediate repayment, due to previous events of default. In response to these financial challenges, the company has entered into discussions with note holders about potential refinancing or restructuring, though no agreements have been reached yet. Additionally, Noble Capital downgraded FAT Brands from Outperform to Market Perform, citing concerns over its debt situation. Twin Hospitality, a subsidiary of FAT Brands, also saw its stock rating downgraded by Noble Capital due to similar debt restructuring concerns. These developments highlight ongoing financial uncertainties for both FAT Brands and Twin Hospitality.

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