Andrew Wiederhorn
| Andrew Wiederhorn | |
|---|---|
| Born | 1965 |
| Education | University of Southern California |
| Occupation | Founder of Fog Cutter Capital |
| Website | Fog Cutter Capital |
Andrew Wiederhorn (born 1965) is an American businessman from Portland, Oregon. He founded Wilshire Credit Corporation and served as its CEO, by the age of 32 amassing a fortune estimated to be worth $140 million.[1] Currently he is CEO and majority shareholder in Fog Cutter Capital, which had been listed for a time on NASDAQ (ticker symbol FCCG), but was delisted for failing to file its financial reports in a timely fashion.[2]
Wilshire Credit Corporation
Wiederhorn founded Fog Cutter Capital after the collapse of Wilshire Credit following questionable investments involving union retirement funds.[3] However, US law enforcement continued a criminal investigation into Wiederhorn's activities while at Wilshire Credit, which was ended when Wiederhorn pleaded guilty to filing a false tax return and paying Jeffrey Grayson, the head of Capital Consultants, an "illegal gratuity" in return for a 12-month sentence and payment of $4.6 million in fines.[4] In April 2013, while conducting a CBS Undercover Boss press interview, Wiederhorn attributed his jail sentence to bad legal advice he had received on a business deal, which lead to the violation of the pension fund law, ERISA. [5]
The controversy around Wiederhorn continued when the board of directors of Fog Cutter voted to give Wiederhorn a bonus equal to the fine he paid the US government, and paid his salary during his incarceration—despite Federal rules that a convict can not engage in business dealings while imprisoned. The immediate result was that NASDAQ delisted Fog Cutter; since October 14, 2004 the corporation's shares have been traded on the pink sheets.[6] In addition Ernst & Young, the company's independent auditors, quit on July 16, 2004; the company has since hired a local auditing firm to audit its books.
The long-term result was that Wiederhorn had his membership in the influential Multnomah Athletic Club suspended in October 2004. The Wall Street Journal described the Club as "the premier social center for executives, politicians and socialities in this city of more than half a million."[7] After finishing his sentence, Wiederhorn initiated a legal fight against the Club, claiming that it has treated him unfairly and that other Multnomah Athletic Club members who have committed crimes were not disciplined as harshly as him. One example he cited was his former business associate Lawrence Mendelsohn, who pleaded guilty in the same case involving Capital Consultants, but served no jail time.[8]
Wiederhorn lost the lawsuit, and found himself "something of a pariah" as a 2011 newspaper article described his situation. Fog Cutter owned a major position in Fatburger, a restaurant chain based in southern California, and because he needed to devote more attention to the restaurant chain, moved to Beverly Hills in 2009, saying that will make his commute to Fatburger's Santa Monica headquarters considerably easier and cheaper.[2] His home in Portland, a 25,000-square-foot (2,300 m2) mansion he and his wife dubbed "The Ivy", was put up for sale July 2011 for $5.7 million. Wiederhorn had acquired the mansion and its properties in a trade from Casey Powell, former CEO of Sequent Computer Systems in 1995, then spent $8.7 million constructing a new wing to the house and other improvements.[9]
Fatburger
Fatburger has struggled through the 2008-10 recession, with subsidiaries in California and Nevada entering Chapter 11 bankruptcy in 2009. In 2011 Wiederhorn announced that the 101-outlet chain has successfully restructured, and he expected to open 30 more restaurants that year, and for sales to exceed $90 million.[9] According to the California Corporation Commission, Fatburger has been given the green light to continue selling its franchise.[10]
The television show Undercover Boss announced that both Wiederhorn and Fatburger would be the subject of its April 5, 2013, episode.[11]
References
- ↑ Nigel Jacquiss "Ask Andrew Wiederhorn" Willamette Week, originally published January 13, 1999
- 1 2 Jeff Manning, "Wiederhorn moves from West Hills to Beverly Hills", The Oregonian, originally published July 20, 2009
- ↑ Jeff Manning and James Long "Union Trusts Sue For Lost Money", reprint of The Oregonian article originally published September 30, 2000.
- ↑ Elizabeth MacDonald, "Town without Pity", Forbes, originally published June 5, 2006.
- ↑ Andrew Wiederhorn, "Fatburger CEO on what he learned on "Undercover Boss", CBS News, originally published April 9, 2013.
- ↑ Fog Cutter Capital Group Inc. Announces Status of Nasdaq Listing Appeal Business Wire, Feb 27, 2005 (LookSmart's FindArticles)
- ↑ Ianthe Jeanne Dugan, "How Not to Curry Favor With a Club: Say It's Full of Crooks", Wall Street Journal, May 22, 2006, national ed.:A1+.
- ↑ Dugan, "How Not to Curry Favor", p. A9.
- 1 2 Jeff Manning, "Wiederhorn to get rid of The Ivy: The scandal-linked executive decides to sell one of his last ties to Portland", The Oregonian, July 28, 2011, p. A1+
- ↑ Fatburger given green light to continue to sell its franchise Retrieved on April 17, 2011
- ↑ Matthew Kish, "Andy Wiederhorn to appear on 'Undercover Boss'", Portland Business Journal March 25, 2013