CEO of Fat Brands (Johnny Rockets, Fatburger) took $47 million in sham loans, not planning to pay them back

Fat Brands stock craters after company, chair Andy Wiederhorn charged in $47 million 'sham' loan scheme

Fat Brands and its chair Andy Wiederhorn were indicted for a "sham" loan scheme that netted him $47 million.
Wiederhorn, 58, stepped down as CEO last year following the company's disclosure that the U.S. Securities and Exchange Commission was investigating him.
Fat Brands' portfolio includes Fatburger, Johnny Rockets and Twin Peaks.

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As chief executive of Fat Brands, Wiederhorn, 58, allegedly directed the company to loan its own funds to him, with no intention of ever paying the "sham" loans back, according to the indictment.

The SEC alleges that Wiederhorn then used the cash to pay for private jets, first-class airfare, luxury vacations, mortgage and rent payments, plus nearly $700,000 in "shopping and jewelry."

Wiederhorn stepped down as CEO last year, following the company's disclosure that the SEC was investigating him. In February, Fat Brands disclosed it had received a Wells notice from the agency, meaning the SEC was planning to take action against it.

Wiederhorn's alleged fraud accounted for roughly 44% of Fat Brands' revenue between 2017 and 2021, which meant the company often was not able to pay its bills. In those situations, Wiederhorn would allegedly redirect funds from credit cards paid for by Fat Brands back to the company with assistance from his son Thayer, who was then the company's chief marketing officer and is now its chief operating officer.

https://www.msn.com/en-us/money/companies/fat-brands-stock-craters-after-company-chair-andy-wiederhorn-charged-in-47-million-sham-loan-scheme/ar-BB1maCda37