NEW YORK (AP) -- Biglari Holdings, owner of the Steak 'n Shake and Western Sizzlin restaurant chains, will pay $850,000 to resolve allegations made by the Federal Trade Commission that it violated premerger reporting laws when it purchased a minority stake in Cracker Barrel last year.
Biglari Holdings Inc. is owned by restaurant business executive Sardar Biglari. He has pressed for changes on Cracker Barrel's board. Earlier this month Cracker Barrel said that it offered Biglari the chance to nominate two directors to its board, but that he dismissed it as a "faux offer."
On Tuesday the Justice Department filed a complaint for civil penalties at the FTC's request, alleging that Biglari claimed his purchase of the Cracker Barrel Old Country Store Inc. stake was a passive investment when he actually planned to be actively involved in the management of the Lebanon, Tenn.-based restaurant operator.
"The passive investment exemption is a narrow one, and we will not hesitate to seek civil penalties against companies that try to abuse it," FTC Chairman Jon Leibowitz said in a statement.
Cracker Barrel has about 620 company-owned restaurants in 42 states. Its stock declined 18 cents to $67.01 in afternoon trading.
- Company Legal & Law Matters
- Cracker Barrel
- Sardar Biglari
- Federal Trade Commission