If performed incorrectly can ultherapy cause fat atrophy? And if so are permanent fat cells damaged?

You'll want to see a board certified doctor with skill, expertise, and the best techniques with ultherapy. If used appropriately, ultherapy will not cause fat atrophy and will give good outcomes.  Keep in mind, a combination approach would give the most improvement. I recommend Ultherapy with RF treatments, lasers, microneedling/PRP or sculptra to get increased collagen, tightening and improve skin tone.  I recommend getting a formal evaluation with an expert. Best, Dr. Emer

The effect of Ultherapy on facial fat loss has been studied in detail by the FDA and it is not significant. They have not issued any warnings or cautions. If a full face treatment was done and all the energy was delivered to the layer which contained some fat - which is not the case with the protocols that we use - then the amount of fat loss is 1.25ml which is less than a quarter of a teaspoon. 
As we age, we lose facial fat and the ultherapy treatment tightens and lifts. Hence, you will be tighter and firmer after ultherapy but may look a little hollow due to the ageing process.  
It is best to see a certified doctor who has experience with the technology so that you can achieve the best possible results. 
Best wishes.