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Papa John’s calls Schnatter lawsuit ‘needless and wasteful’

Pizza chain’s founder requests documents justifying his removal as spokesperson

Papa John’s International, Inc., founder John Schnatter has sued the company to get access to records to see the decision-making process behind his removal as the company’s spokesperson.

A Papa John’s spokesman made the following statement via email: “We are saddened and disappointed that John Schnatter has filed a needless and wasteful lawsuit in an attempt to distract from his own words and actions. We are providing Mr. Schnatter all of the materials he is entitled to as a director. We will not let his numerous misstatements in the complaint and elsewhere distract us from the important work we are doing to move the business forward for our 120,000 corporate and franchise team members, and our franchisees, customers and stakeholders.” 

Schnatter resigned as chairman of the company’s board earlier this month after it was revealed that he had used a racist epithet during a meeting in May. However, Schnatter remains on the Papa John’s board. 

The board subsequently moved to cancel an “Agreement for Service as Founder” that allowed Schnatter to attend major corporate events, visit franchises, participate in meetings with management and investors and act as the brand’s spokesperson. CEO Steve Ritchie, who replaced Schnatter at the beginning of the year, also said the founder and his picture would be removed from all advertising and marketing materials

Schnatter, who owns between 30 percent and 31 percent of Papa John’s stock, then went public saying his resignation was a mistake. The board responded by adopting a so-called “poison pill,” a legal action that makes it much more expensive to buy a company but allowing other shareholders to buy more shares at a discount. The action was seen as a move to keep Schnatter from attempting a takeover. 

Papa John’s stock inched downward on the news and was down 0.5 percent for the day at press time.

Contact Bret Thorn at [email protected]

Follow him on Twitter: @foodwriterdiary 

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