Andy Wiederhorn believes his past problems may be to blame for his current predicament.
The CEO of brand collector Fat Brands, in his first public comments since word emerged that he was under a federal investigation over his spending, said that his past imprisonment over tax charges may have attracted federal investigators now.
Fat Brands last month acknowledged that its CEO was under a federal investigation, which Wiederhorn’s attorney said was rooted in a recently unsealed derivative lawsuit shareholders filed against the company over its 2020 merger with Wiederhorn’s investment firm, Fog Cutter Capital.
The investigation has raised questions about Wiederhorn's history. He pleaded guilty in 2004 to federal tax charges related to a company he once ran called Wilshire Credit Corp. and he spent 16 months in prison.
“Given my personal history,” Wiederhorn said, “I’m not surprised the government looked into allegations raised in the derivative lawsuit.”
Wiederhorn made the comments during Fat Brands’ fourth-quarter earnings call on Monday. He said that the federal investigation did not include Fat Brands itself. And he repeated the connection between the investigation and the derivative lawsuit.
Shareholders accused Wiederhorn of using Fat Brands as “a discount lender and a plaything” to Fog Cutter Capital.
Wiederhorn defended the 2020 Fat Brands-Fog Cutter merger. That merger paved the way for nearly $1 billion in acquisitions that Fat Brands made last year, including deals for Global Franchise Group, Fazoli’s and Twin Peaks. “The merger of Fog Cutter and Fat Brands was transformative,” Wiederhorn said. “That led to its growth by more than 500%.”
Last month, the Los Angeles Times reported that federal agents raided the home of his son Thayer as part of an investigation into securities and wire fraud, money laundering and attempted tax evasion. The report also said investigators asked for a search warrant for Wiederhorn’s Beverly Hills home. The issue were credit card purchases allegedly made with an account belonging to Fat Brands.
That report led Fat Brands to acknowledge that its chief executive was under investigation.
On Monday, Wiederhorn suggested that his role as the CEO of a public company “attracts its share of visibility.”
Wiederhorn said that documents revealing the federal warrants “should not have been made public” and said that his company was not the target of an investigation. He also said the Los Angeles Times article included factual errors, but he did not detail what they were.
“I categorically deny all the claims raised in the article,” he said, noting that all transactions were properly documented and disclosed to the boards of Fat Brands and Fog Cutter.
“I look forward to being able to put these matters behind us,” Wiederhorn said. “It’s a distraction personally. But our team is focused on running the business.”
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