This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration. Need a new registration confirmation email? Click here
SAN DIEGO and SAN ANTONIO,
June 17, 2013 /PRNewswire/ --
Shareholder rights law firm Robbins Arroyo 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 Arroyo Investigates the Compensation and Business Dealings Between Biglari Holdings and the Company's Chairman and CEO
Robbins Arroyo 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 Arroyo'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.