Business Context and Reporting Period
This Form 8-K Current Report was filed by Biglari Holdings Inc. on May 26, 2021. The filing discloses the entry into a material definitive agreement regarding an amendment to the Partnership Agreement of The Lion Fund II, L.P., approved by the independent members of the board of directors.
Key Financial Metrics
The filing text does not provide specific values for revenue, profit, cash flow, margins, debt, or liquidity. The report focuses exclusively on a governance and fee structure amendment rather than financial performance data.
Material Changes
The primary material change is an amendment to The Lion Fund II, L.P. Partnership Agreement effective January 1, 2021. Under this amendment, Biglari Capital Corp., acting as the General Partner, will not charge incentive fees on Biglari Holdings affiliated accounts until losses associated with prior withdrawals of capital have been fully recovered. The amendment mandates that all prior period losses must be recovered for each capital account before any incentive reallocation can be earned.
Guidance, Outlook, and Risks
The filing contains no forward-looking guidance, management commentary on future operations, or specific risk factors beyond the terms of the fee amendment. The summary description of the agreement is qualified in its entirety by the full text of the Second Amended and Restated Partnership Agreement attached as Exhibit 10.1.
Key Facts for Investor Verification
- Verify the full terms of the Second Amended and Restated Partnership Agreement of The Lion Fund II, L.P. (Exhibit 10.1) to understand the specific mechanics of the "high-water mark" style loss recovery requirement.
- Confirm the impact of the suspended incentive fees on Biglari Capital Corp.'s future revenue streams from affiliated accounts.
- Review the definition of "prior withdrawals of capital" and "prior period losses" within the attached agreement to assess the timeline for fee resumption.