Where on Del Taco's condensed consolidated balance sheet are the accruals for legal matters presented?
Del_Taco Franchise · 2025 FDDAnswer from 2025 FDD Document
itional $9.3 million. These amounts are included within "Accrued liabilities" on our consolidated balance sheet as of September 29, 2024. The Company will continue to accrue for post-judgment interest until the matter is resolved.
Torrez — In March 2014, a former Del Taco employee filed a purported Private Attorneys General Act claim and class action alleging various causes of action under California's labor, wage, and hour laws. The plaintiff generally alleges Del Taco did not appropriately provide meal and rest breaks and failed to pay wages and reimburse business expenses to its California non-exempt employees. On November 12, 2021, the court granted, in part, the plaintiff's motion for class certification. The parties participated in a voluntary mediation on May 24, 2022 and June 3, 2022. On June 4, 2022, we entered into a Settlement Memorandum of Understanding (the "Agreement") which obligates the Company to pay a gross settlement amount of $50.0 million, for which in exchange we will be released from all claims by the parties. On August 8, 2023, the court issued its final approval of the settlement and on August 9, 2023 final judgment was entered. The Company made the full payments for the settlement amounts. As of September 29, 2024, the Company has no further amounts accrued on its consolidated balance sheet.
J&D Restaurant Group — On April 17, 2019, the trustee for a bankrupt former franchisee filed a complaint generally alleging the Company wrongfully terminated the franchise agreements and unreasonably denied two perspective purchasers the former franchisee presented. The parties participated in a mediation in April 2021, and again in December 2022, but the matter did not settle. Trial commenced on January 9, 2023. On February 8, 2023, the jury returned a verdict finding the Company had not breached any contracts in terminating the franchise agreements or denying the proposed buyers. However, while the jury also found the Company had not violated the California Unfair Practices Act, it found for the plaintiff on the claim for breach of implied covenant of good faith and fair dealing, and awarded $8.0 million in damages. On May 9, 2023, the court granted the Company's post-trial motion, overturning the jury verdict and ordering the plaintiff take nothing on its claims. As a result,
Source: Item 21 — FINANCIAL STATEMENTS (FDD page 58)
What This Means (2025 FDD)
According to Del Taco's 2025 Franchise Disclosure Document, as of September 29, 2024, Del Taco has no further amounts accrued on its consolidated balance sheet for the Torrez case. This case involved a former employee's claim regarding California labor, wage, and hour laws, which was settled with the Company agreeing to pay a gross settlement of $50.0 million. The court granted final approval of the settlement on August 8, 2023, and final judgment was entered on August 9, 2023, with the Company having made full payments for the settlement amounts.
Additionally, as of September 29, 2024, Del Taco has no amounts accrued for the J&D Restaurant Group case on its consolidated balance sheet. This case involved a complaint from the trustee of a bankrupt former franchisee. Although a jury initially found in favor of the plaintiff and awarded $8.0 million in damages, the court overturned the jury verdict on May 9, 2023, leading to the reversal of the $8.0 million accrual. However, the plaintiff has appealed the trial court's post-trial rulings.
These details are found within Item 21 of the FDD, which covers the company's financial statements and any related legal proceedings. While the specific line item on the balance sheet is not mentioned, the document clarifies that as of the date indicated, there are no outstanding accruals for these particular legal matters due to either settlement and payment or reversal of prior accruals following a court decision.