A federal bankruptcy court judge this week approved a plan to provide $1.9 million in bonuses to dozens of Fat Brands workers deemed crucial to the company’s operation.
The owner of Twin Peaks, Johnny Rockets and others has identified 114 “non-insider” workers deemed necessary to maintain the continuity of operations as the company is put up for sale.
The bonuses would be equal to 15% of the workers’ salaries.
The added pay represents “a meaningful incentive,” Chief Restructuring Officer John DiDonato said in a filing. It’s also “reasonable relative to the potential cost of disrupted operations and loss of key personnel during this period.”
The bonuses will be paid in three installments to ensure the workers stick around, including 25% following the order, another 25% once the sale is closed and 50% 35 days after the sale is closed.
If Fat Brands isn’t sold, or most of it is not, then most of the bonuses will be paid once the bankruptcy reorganization plan is approved.
Retention bonuses for key workers are common in sale process, including those through bankruptcy.
Fat Brands in early January handed out retention bonuses to a trio of top executives, two of whom were sons of the company’s founder and CEO Andy Wiederhorn. But Wiederhorn has since taken a “leave of absence” from his role and his sons have all been terminated in a deal with the company’s lenders.
The operator is planning an auction this month, which is expected to close in May. Some landlords have asked for a delay in the process to give them more time to analyze the bidders.
Fat Brands filed for bankruptcy earlier this year with $1.5 billion in debt, the bulk of that from a series of securitization financing structures in 2020 and 2021 when the company bought up several chains, including Twin Peaks and Global Franchise Group.
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