Dive Brief:

• Fat Brands cut most of its board of directors on March 28, according to an 8-K filed with the U.S. Securities and Exchange Commission on Monday. The action was undertaken by the majority shareholder, Fog Cutter Capital, which is owned by Andrew Wiederhorn, the ougtoing CEO and current chairman of the board at Fat Brands.
• The company replaced the majority of its board with a new group of directors including three of Andrew Wiederhorn’s children, Mason, Taylor and Thayer Wiederhorn, and their grandfather, Donald Berchtold. 
• Earlier this year, Andrew Wiederhorn announced he would resign as CEO effective May 5 to keep the company from being negatively impacted by an ongoing federal investigation into his conduct.

Dive Insight:

According to the company’s most recent 10-K, as of December 25, 2022, Fat Brands’ board consisted of six members: Andrew Wiederhorn, Kenneth Anderson, Lynne Collier, Amy Forrestal, James Neuhauser and Edward Rensi. All save Wiederhorn were dismissed, though Collier was re-appointed, according to the 8-K. Rensi was offered a seat on the new board, but withdrew.

Donald Berchtold, Tyler Child, Kenneth Kepp, Carmen Vidal, Mark Elenowitz, Mason Wiederhorn, Taylor Wiederhorn and Thayer Wiederhorn were all appointed as directors, together with Andrew Wiederhorn and Collier, bringing the board’s size to 10 members, half of whom are members of the Wiederhorn family. Wiederhorn is currently under federal investigation for financial misconduct, and previously served time in prison on charges stemming from alleged pension fraud.

Child, Elenowitz and Collier have experience in finance, according to the company’s website, while Kepp is CFO at a tax advising firm, and Vidal has worked in franchising for Fat Burger and later Fat Brands since 2006. The three Wiederhorn sons work for Fat in an executive capacity. Thayer Wiederhorn is chief operating officer, Taylor Wiederhorn is chief development officer and Mason Wiederhorn is chief brand officer.

The compensation committee, and nominating and corporate governance committees, were dissolved, according to the 8-K. As part of these changes, Fat Brands “has elected ‘controlled company’ status for purposes of the corporate governance rules of The Nasdaq Stock Market, which provide an exemption from the requirement to maintain a Board comprised of majority independent directors.” 

Fat Brands has grown rapidly since merging with its controlling shareholder, Fog Cutter Capital, in December 2020. Fog Cutter was founded by Wiederhorn. Since then, the company has acquired a number of brands and set records for new store openings, while pursuing co-branding as a strategy to bolster the sales at individual stores.