FTC Fines Biglari Holdings Inc. for Repeatedly Violating Antitrust Laws

Federal Trade Commission

WASHINGTON, D.C. — The Federal Trade Commission announced that restaurant chain owner and investment fund operator Biglari Holdings Inc. will pay a $1.4 million civil penalty to settle charges that two acquisitions it made on March 26, 2020, of shares of restaurant operator Cracker Barrel Old Country Store, Inc. violated the Hart-Scott-Rodino (HSR) Act.

According to the complaint, these two acquisitions, together with Biglari’s prior holdings of Cracker Barrel, caused it to exceed an HSR filing threshold, triggering its obligation to file an HSR Form and wait before completing the acquisition. Failing to do so violated the HSR Act. Biglari claimed ignorance of its obligation to file in this matter despite having been previously required to pay $850,000 for HSR violations related to earlier purchases of Cracker Barrel stock.

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“Biglari claimed that it was unaware of the requirement to aggregate its current holdings when making an acquisition to determine the size of the transaction, which even if true, is grossly negligent,” said Holly Vedova, Director of the Bureau of Competition. “Filers have been required to aggregate their holdings since the HSR Rules took effect in 1978.”

The HSR Act requires companies and individuals to report large transactions over a certain threshold to the FTC and DOJ so that the federal agencies can investigate the deals before they close. Smaller transactions may also be reportable under the Act due to the need to aggregate all current holdings. The maximum civil penalty for Biglari’s failure-to-file violation is currently $43,792 per day.

The current complaint states that following its March 2020 share acquisitions, Biglari made a corrective filing in June 2020 only after the FTC’s Premerger Notification Office contacted the company and asked why no filing had been made. According to the complaint, Biglari was in continuous violation of the HSR Act from March 16, 2020, when it acquired the Cracker Barrel voting securities valued in excess of the HSR Act’s then-applicable $94 million filing threshold, through July 20, 2020, when the waiting period expired on its corrective filing.

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The Commission vote to accept the settlement and refer the matter to the Department of Justice for filing was 5-0. The Department of Justice filed the complaint and proposed stipulated order on the FTC’s behalf in the U.S. District Court for the District of Columbia on Dec. 22, 2021.

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