Not everybody wants Fat Brands sold this quickly.
Landlords in the case of the bankrupt restaurant chain operator, including the giant Simon Property Group, are objecting to the aggressive timeline for an upcoming auction for the company and its various assets.
Among other things, the landlords say that the timeline—which would result in a closed sale as early as May 11—does not give them enough time to adequately assess winning bids.
Fat Brands operates several companies, including Twin Peaks, Round Table Pizza, Johnny Rockets and others. The company filed for bankruptcy earlier this year with some $1.5 billion in debt.
The company has established a set of deadlines, including one that already passed last Friday in which potential buyers have to indicate their interest in acquiring some or all of the Fat Brands chains.
One of the deadlines is this Friday, when Fat Brands is to set the list of contracts, including leases, that it will and will not assume as part of the sale plan. The parties to those contracts then have two weeks to file objections.
Landlords and other parties have “only 14 calendar days to review the proposed cure amounts, reconcile their records, calculate any amounts owed … retain counsel if necessary and file a detailed objection with the court,” Simon said in its filing.
Another group of landlords cited an aggressive timeline with which companies can object once the auction is over.
Bids for the company are due April 24 and the auction is set for April 28. Companies have to submit their objections to that sale by the end of the day on May 5 and a hearing is set for May 8.
That’s not enough time, the landlords said, requesting another week. “By moving the sale hearing an additional week, the sublandlords, the other landlords and all other parties involved would be afforded the requisite time to consider the results of the auction and the adequate assurance packages,” they noted in a filing.
The filings demonstrate the challenges associated with selling companies out of bankruptcy.
Fat Brands and its lenders want a quick sale because the longer it operates through bankruptcy, the more money the company needs to fund operations. A company operating in bankruptcy is there because it’s losing money, and spending too long operating before a sale puts it in danger of running out of cash.
But these companies also have vendors and landlords that are owed money and may have their contracts canceled during this process and often want more time to argue their case.
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