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Sardar Biglari’s decade-plus at the helm of Midwestern burger slinger Steak ‘n Shake has been, uh, shaky, at best. Loaded with debt and, like all restaurants, beset by the pandemic, all seemed lost until, Biglari says, Fortress Investment Group—as it does—expressed interest in buying a portfolio of Steak ‘n Shake real estate.

But Fortress didn’t buy the real estate. Instead, it allegedly bought up more than half of the company’s distressed debt, apparently in hopes of forcing Steak ‘n Shake into bankruptcy, where Fortress itself could then just buy the whole company, rather than just the 15 properties.

Well, it didn’t work: Biglari somehow found the $100 million he needed to pay off the debt and stay out of bankruptcy. And now, he hopes, he’s found a way to get some of it back.

Steak ’n Shake’s lawsuit, filed Friday in Marion County Superior Court in Indiana, seeks to recoup alleged losses from Fortress’s actions…. Steak ’n Shake said management “thought they were providing this information to a potential counterparty to a real estate transaction, not to a vulture investor” seeking to potentially seize control by forcing the company into bankruptcy…. Steak ’n Shake said the information provided to Fortress about the 15 properties made it possible for the investment firm to extrapolate the total value of the company’s real estate and other details concerning Steak ’n Shake’s value, which was useful to anyone aiming to buy the company.

Steak ’N Shake Avoids Bankruptcy, Then Sues Top Lender Fortress [WSJ]


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