RBI, Carrols Merger $18.2M Securities Class Action Settlement

Investors who held Carrols Restaurant Group Inc. common stock and received, or had the right to receive, $9.55 per share in cash at the May 16, 2024, closing of the company's acquisition by Restaurant Brands International Inc. may be eligible to receive a cash payment from a class action settlement.

Restaurant Brands International Inc. and Matthew Perelman and Alexander Sloane, Carrols special committee members, agreed to pay $18.2 million to settle a stockholder class action lawsuit alleging they breached their fiduciary duties in connection with RBI's acquisition of Carrols. The lawsuit also alleged RBI received unjust enrichment and the merger occurred at an unfair price for minority stockholders.

Who can file a claim?

The settlement class includes all registered holders and beneficial owners of Carrols common stock who received, or had the right to receive, $9.55 per share in cash for their shares at the closing of RBI's acquisition of Carrols on May 16, 2024.

Additional details

• Both individuals and entities can be class members.
• The class includes heirs, assigns, transferees and successors-in-interest of eligible holders.
• Investors who bought Carrols shares before the closing but whose trades had not yet settled are class members for those shares.
• The class is certified solely for settlement purposes and is a non-opt-out class under Delaware Court of Chancery rules 23(a), 23(b)(1) and 23(b)(2), meaning class members cannot exclude themselves from the settlement.

How much can class members get?

The total settlement fund is $18,200,000. The amount each class member receives depends on several factors:

• The number of eligible shares held at the closing of the acquisition on May 16, 2024
• The total number of eligible shares in the class (estimated at about 41.5 million)
• The amount of the net settlement fund after court-approved deductions

The settlement administrator will distribute payments on a pro rata basis according to the court-approved plan of allocation:

• Each class member's payment equals the number of eligible shares they held at closing times the per-share recovery.
• The per-share recovery is the net settlement fund divided by the total number of eligible shares.
• For shares held in a "street name" through a broker, the settlement administrator will distribute payments to Depository Trust & Clearing Corp. participants, which will then distribute payments on a pro rata basis to beneficial owners.
• For shares held of record outside DTCC, the settlement administrator will distribute payments directly to the record holder. It will not issue a check for $10 or less.

No claim form needed to receive payment

Class members do not need to submit a claim form to receive payment. The settlement administrator will distribute payments the same way class members received the original $9.55 per share. For shares held in a street name, the broker will deposit the payment into the same brokerage account that received the merger consideration.

Settlement administrator's mailing address: Carrols Stockholders Litigation, c/o A.B. Data Ltd., P.O. Box 170500, Milwaukee, WI 53217

$18.2 million settlement fund

The $18,200,000 settlement fund includes:

• Settlement administration costs: To be determined
• Attorneys' fees and expenses: Up to $3,640,000
• Service awards to plaintiffs: Up to $40,000 total
• Payments to eligible class members: Remainder of the fund

Important dates

• Fairness hearing: Nov. 23, 2026

When is the Carrols stockholder class action settlement payout date?

The settlement administrator will issue payments to eligible class members after the court resolves any appeals and grants final approval of the settlement.

Why did this class action settlement happen?

The class action lawsuit alleged RBI used its rights as Carrols' franchisor and preferred stockholder to coerce a special committee and stockholders into approving the merger at an unfair price. The plaintiffs claimed RBI leveraged its longstanding relationship with Perelman and Sloane to influence the special committee and did not tell stockholders about that relationship.

The defendants denied all allegations of wrongdoing but agreed to settle to avoid the burden, expense and distraction of continued litigation.

Sources

1. Class notice
2. Settlement agreement