Steak ’n Shake Inc. sued lender Fortress Investment Group LLC after the burger chain paid off debt coming due to avoid bankruptcy, accusing Fortress of misusing confidential information to mount a takeover bid.
The Indiana-based milkshake-and-burger chain, backed by entrepreneur Sardar Biglari, said that Fortress obtained sensitive information through negotiations for a potential real estate deal with Steak ’n Shake, then used that knowledge to build an $89 million position in the company’s loans.
After acquiring the loans, Fortress made clear it “would not accept a negotiated repayment” and said it “would either force the company to repay the loans in full or file for bankruptcy,” according to the complaint.
Steak ’n Shake paid off the loans in full on Friday, spending nearly $103 million to retire the debts and avoid a bankruptcy filing, the company said.
Steak ’n Shake’s lawsuit, filed Friday in Marion County Superior Court in Indiana, seeks to recoup alleged losses from Fortress’s actions.
