Food fight

There's definitely a bad case of indigestion over at Cheesecake Factory. The Calabasas Hills-based restaurant chain, one of Southern California's biggest success stories of recent years, received a letter from Nasdaq saying it was not in compliance with the exchange's listing standards because it has not yet filed a second-quarter report. The reason it didn’t file is because it’s in the middle of reviewing the way its stock options have been issued. The Securities and Exchange Commission is also nosing around. At issue is whether the company backdated the price of options given to executives. Wait, there's more: A shareholder lawsuit has been filed against the company in Superior Court, alleging abuse of control, waste of corporate assets and gross mismanagement – all related to the options.

The stock took a pretty good hit today. It’s trading at around $24 a share, down from its 52-week high of $40. Thing is, if all this were happening in a strong economy, it might not be such a big deal. The company is still well-run, people like eating there and sales keep increasing. But there are signs that consumers are pulling back and the Cheesecake people have already warned shareholders of slower sales down the road.