A California federal judge denied most of the motion to dismiss filed against Fatburger’s parent company. U.S. District Judge Philip S. Gutierrez ruled that investors can proceed with their claims that the company omitted key information in its initial public offering documents. The judge stated that FAT Brands Inc.’s failure to disclose its management team’s former bankruptcies in similar business circumstances could be considered misleading, especially because the regulatory filings touted the management team’s “track record” and “experience.” The IPO documents didn’t mention that several Fatburger subsidiaries filed for bankruptcy in 2009 while under the direct supervision of the FAT Brands’ current management team, the order said. Fatburger is a fast-casual restaurant operated by FAT Brands.

The Fatburger bankruptcies also occurred in the context of an acquisition spree, which was to be one of FAT Brands’ key growth strategies following the IPO, according to court documents. The incidents allegedly also resulted in Fatburger’s owner, Fog Cutter Capital Group Inc., having its stock delisted. FCCG is run by members of FAT Brands’ leadership team and is a majority shareholder in FAT Brands, according to court documents.

However, Judge Gutierrez said shareholders didn’t explain how certain other alleged omissions could have misled investors. Investors’ second amended complaint pointed out that FCCG had also been delisted from the Nasdaq in 2004 for allegedly “one-sided agreements,” such as paying an executive $4.75 million while he was in jail and allowing him to exercise considerable control over the company while incarcerated. But the complaint didn’t show why that publicly available information was needed in the IPO filings, the order said.

The case is Adam Vignola v. FAT Brands Inc. et al., case number 2:18-cv-07469, in the U.S. District Court for the Central District of California.

This blog is intended to provide information to the general public and to practitioners about developments that may impact Oregon class actions.

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A class action has been filed on behalf of a proposed class of Canada Goose investors who allege the luxury outerwear brand concealed inhumane treatment of animals it sourced materials from, causing a stock price decline after the company came under scrutiny for falsely advertising about its practices. According to the complaint, a series of revelations about the company’s sourcing, including a news release by People for the Ethical Treatment of Animals, a media report and a Federal Trade Commission investigation of the company’s advertising, all contributed to a “precipitous decline” in the price of the company’s stock.

The complaint claims these revelations on the sourcing were met with per-share stock drops of about 1.36% to almost 5%. The proposed class would include those who purchased Canada Goose stock between March 16, 2017, when the company started trading on the New York Stock Exchange after its initial public offering, and Aug. 1, 2019, when the media report was published.

The case is Cheng v. Canada Goose Holdings Inc. et al., Case Number 1:19-cv-08204, in the U.S. District Court for the Southern District of New York.

This blog is intended to provide information to the general public and to practitioners about developments that may impact Oregon class actions.

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Volkswagen has agreed to settle a class action brought by investors arising out of its diesel emissions-cheating scandal. The complaint alleged that it knowingly issued false financial statements about its exposure and liabilities. Continue reading “VW Settles Securities Class Action for $48 Million”

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Shareholders of Facebook stock sued the social media giant alleging that Facebook made misleading claims about its use of user data, which blew up this month when its alleged relationship to a Trump-linked data firm was made public.

Continue reading “Securities class action filed against Facebook relating to data provided to Cambridge Analytica”

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Continue reading “U.S. Supreme Court says state courts may continue to hear securities class actions”

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Continue reading “Yahoo agrees to $80 million settlement of securities class action arising out of data breach”

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Continue reading “LJM Preservation and Growth Fund sued in class action”

Investors in a class action against media analytics company comScore Inc. asked a New York federal judge on January 12th to approve a $110 million settlement.

Continue reading “ComScore settles investor class action for $110 million”

Shareholders of Brazilian oil giant, Petrobas, have obtained a nearly $3 billion settlement of a class action alleging that the energy company concealed kickbacks that top officials and their political patrons received in exchange for directing Petrobras to buy and build production facilities at inflated prices.

Continue reading “Brazilian oil corporation, Petrobas, agrees to $3 billion securities fraud settlement”

HPHewlett Packard has agreed to pay $100 million to end a proposed securities class action over its $11 billion acquisition of British software company, Autonomy Corp.

Continue reading “Hewlett Packard settles securities class action”