Biglari Holdings, Inc. Is Being Investigated on Behalf of Shareholders
Robbins LLP is investigating whether officers and directors of Biglari Holdings, Inc. (NYSE: BH) breached their fiduciary duties to shareholders. Biglari Holdings, through its subsidiaries, engages in investment management and the franchising and operating of restaurants in the United States.
Robbins Investigates the Compensation and Business Dealings Between Biglari Holdings and the Company’s Chairman and CEO
Robbins is investigating the business dealings between Biglari Holdings and its Chairman and CEO, Sardar Biglari. On November 5, 2010, the board of directors of Biglari Holdings approved a compensation package for Mr. Biglari, providing for a salary of $900,000 and additional payments of up to $10 million each year the company’s book value increases by 6%. Then on January 11, 2013, Biglari Holdings announced that the company had entered into a Trademark License Agreement with Mr. Biglari. According to the agreement, the company must pay Mr. Biglari 2.5% of the company’s gross revenues for five years if: (i) there is a change of control at Biglari Holdings; (ii) Mr. Biglari is terminated from the company without cause; or (iii) Mr. Biglari resigns from his employment at the company due to an involuntary termination event. Based on the company’s 2012 revenue, Mr. Biglari would receive approximately $18.35 million of the company’s $38.82 million operating income if one of the triggering events occurred. As a result of the agreement, a substantial amount of the company’s value would likely be lost if any of the triggering events occur.
Robbins’s investigation concerns whether certain of Biglari Holdings officers and directors are failing to act in the company’s and shareholders best interests by causing or allowing Mr. Biglari to receive inflated compensation and near total entrenchment in the company.
Robbins highlights that Biglari Holdings’ shareholders have the option to pursue a shareholder derivative action through which shareholders aim to hold insider wrongdoers accountable for their actions, prevent future misconduct, and bring long-term value back to the company.
Biglari Holdings shareholders who would like more information about their rights and potential remedies can complete the form below and we will contact you directly. You can also contact attorney Darnell R. Donahue at (800) 350-6003.