Welcome to WSJ Pro Bankruptcy's Daily Briefing. It's Monday, January 26. In today's briefing, new litigation involving the owner of Fatburger and Johnny Rockets, which has already been battling investors on other fronts.

FAT Brands sued over alleged debt default. A Jefferies Group-backed investment fund sued FAT Brands, claiming the restaurant franchiser defaulted on its debt by failing to deliver certain pledged shares.

352 Capital Group filed a lawsuit in New York on Thursday alleging that the Fatburger and Johnny Rockets owner never delivered certain promised shares from a spun-off entity to bondholders. As a result, the company is now in default and owes those investors roughly $158.9 million, according to the complaint, filed in New York state court.

• A group of lenders is working with financial adviser Houlihan Lokey and law firm White & Case to advise them on restructuring talks, while FAT Brands is being advised by counsel from Latham & Watkins.

Share your tips, suggestions and feedback with the WSJ Pro Bankruptcy team: Alexander Gladstone; Jodi Xu Klein; Akiko Matsuda; Alicia McElhaney; Andrew Scurria; Becky Yerak. 

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