Sardar Biglari, the restaurant entrepreneur vying for two seats at Cracker Barrel Old Country Store, is set to pay an $850,000 fine to the federal government, which has accused him of violating rules governing the reporting of his stake in the Lebanon-based chain.
Biglari first made Cracker Barrel headlines in mid-June of last year, when he said his team had amassed a stake of more than 9 percent in the previous month following a disappointing earnings report. (He now owns almost 15 percent.) His initial declaration, Justice officials say, should have been accompanied by premerger filings mandated under the Hart-Scott-Rodino Act, which lets the federal government examine the potential effects of mergers and acquisitions.
"Although the HSR Act exempts from its premerger notification requirements certain acquisitions 'solely for the purpose of investment,' Biglari Holdings' acquisitions were not made solely for the purpose of investment," DOJ officials said in a statement. "The complaint alleges that Biglari Holdings was in violation of the HSR Act from June 8, 2011 through Sept. 22, 2011."
Biglari last week formally filed a proxy statement saying he and right-hand man Phil Cooley will compete for seats at Cracker Barrel's boardroom table. His push a year ago was soundly defeated, although Cracker Barrel investors did also shoot down a poison pill. Shareholders will again get to vote on both of those issues in mid-November.
At about 10:50 a.m. Tuesday, shares of Cracker Barrel (Ticker: CBRL) were changing hands at $67.20, flat on the day. So far in 2012, they're up more than 30 percent.
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