FAT Brands (FATAQ) presents a liquidation value that is deeply negative by any measure, consistent with the MFFAIS-reported cash liquidation value of approximately negative $1.72 billion. The balance sheet as of September 28, 2025 shows total assets of $1.21 billion against total liabilities of $1.80 billion, producing a GAAP deficit of approximately $594 million including noncontrolling interest. Under liquidation haircuts, the recovery shortfall widens substantially. The asset side is dominated by goodwill ($285 million, zero recovery), other intangibles net $584 million (zero recovery under liquidation lens), and operating lease ROU assets ($189 million, zero recovery as the corresponding liability extinguishes the asset value). Tangible assets recoverable at haircut include: unrestricted cash $2.1 million (100%), restricted cash $20.6 million (100%), AR net $14.0 million (roughly $13 million at 90-95%), inventory $7.4 million (roughly $4-5 million at 60%), and PP&E net $87.2 million (roughly $44-61 million at 50-70%). Total liquidation asset recovery is estimated at approximately $85-100 million against face-value liabilities of approximately $1.80 billion, indicating equity recovery of negative $1.7 billion or worse. The single most consequential development since the prior filing (June 29, 2025 10-Q, which reported no defaults) is that the company has entered formal default under all five Securitization Note indentures. $1.26 billion of total debt face value has been reclassified to current as of September 28, 2025, up from $49.2 million current in the prior period. Trustee Notices of Event of Default were issued October 30-November 3, 2025 across GFG, FB Royalty, Fazoli's, FB Resid, and Twin indentures, triggered by failure to deposit retained collections into collection accounts and failure to make quarterly interest payments due October 27, 2025. The company explicitly states it cannot pay the outstanding principal if accelerated and acknowledges going-concern doubt. Separately, the GFG Preferred Stock put liability ($67.5 million) and Twin Peaks Preferred Stock ($24.3 million) remain outstanding and are classified in current liabilities and temporary equity respectively. Three new promissory notes totaling approximately $23.9 million face value at rates of 13.5%-18.65% were added in 2025, subordinate to the securitization structure. Operating lease obligations of $214.4 million carry at face value in liquidation. The filing discloses $8.9 million of accumulated unpaid preferred dividends on the Series B Preferred. Goodwill impairment and intangible write-down risks exist but are discussed in the narrative without a separately tagged XBRL impairment charge on goodwill this period.
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