Caption: Kates v. FAT Brands, Inc., et al.
Case No.: CV 24-4775-MWF (MAAx)
Jurisdiction: U.S. District Court, Central District of California
Judge: Hon. Michael W. Fitzgerald
Summary
On January 29, 2026, Judge Michael W. Fitzgerald denied defendants’ motion to dismiss the Second Amended Complaint in the securities class action against FAT Brands, Inc. The denial was entered without prejudice. The Court stayed the action following the filing of a notice of bankruptcy by FAT Brands pursuant to the automatic stay provisions of the Bankruptcy Code.
Allegations Against FAT Brands, Inc.
Plaintiffs alleged securities law violations by FAT Brands and related defendants, as reflected in the Second Amended Complaint addressed by the Court. The order references the operative complaint but does not detail the specific alleged misstatements or omissions.
Defendants’ Motion to Dismiss
Defendants moved to dismiss the Second Amended Complaint. The motion was pending at the time FAT Brands filed a notice of bankruptcy.
Plaintiffs’ Opposition
The Court’s order does not describe plaintiffs’ opposition arguments to the motion to dismiss.
Court’s Ruling
The Court denied defendants’ motion to dismiss without prejudice. The Court also vacated the hearing previously scheduled on the motion. Separately, the Court stayed the entire action pursuant to 11 U.S.C. § 362 after FAT Brands filed a notice of bankruptcy.
Court’s Rationale
Bankruptcy Stay: The Court held that the filing of FAT Brands’ notice of bankruptcy triggered the automatic stay, requiring that the action be stayed.
Procedural Disposition: In light of the stay, the Court denied the pending motion to dismiss without prejudice and vacated the scheduled hearing.
Case Status
The case is stayed due to FAT Brands’ bankruptcy proceedings. The parties must file joint status reports every 90 days regarding the bankruptcy, with the first report due no later than April 29, 2026.
