John Schnatter files lawsuit against Papa John’s

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Papa John's is losing the pizza wars. Big time.

John Schnatter, the ousted founding father of pizza chain Papa John’s, is suing his former firm.

In a lawsuit filed in Delaware Chancery Courtroom on Thursday, Schnatter’s attorneys say he’s in search of to examine firm paperwork “due to the unexplained and heavy-handed method by which the corporate has handled him because the publication of a narrative that falsely accused him of utilizing a racial slur.”

Papa John’s denied Schnatter’s claims in a press release. The corporate stated it was “saddened and dissatisfied” by the lawsuit, which it referred to as “pointless and wasteful.”

Schnatter has admitted he stated the N-word on a convention name with a advertising agency. Schnatter claimed the agency requested if he was racist, and he used the N-word in describing how KFC’s Colonel Sanders used to speak. Schnatter has since stated he additionally advised the agency that he himself would not ever use that phrase.

Associated: Papa John’s is frightened that Papa John will attempt to take over the corporate

The corporate requested him to resign as chairman of the board, which he did, although he stays on the board as a director. He owns 29% of Papa John’s (PZZA) inventory.

Schnatter has since stated he regrets stepping away from the corporate. He additionally accused the board of not “doing any investigation” and stated its resolution to take away him as chairman was based mostly on “rumor and innuendo,” based on a letter he despatched to the board earlier this month.

The board of administrators just lately authorised a so-called poison capsule provision, a rare step aimed toward stopping the previous CEO from gaining extra management of the corporate.

Papa John’s has additionally eliminated Schnatter from its commercials and advertising supplies and kicked him out of workplace area at its headquarters.

Within the grievance filed Thursday, Schnatter alleges that the opposite members of the Papa John’s board might have “breached their fiduciary duties” once they determined to sever sure enterprise ties with him.

Associated: Papa John’s founder says it was a ‘mistake’ to resign

“Both the purportedly unbiased administrators acted with out ample data and breached their responsibility of care,” or they “deliberate this coup upfront,” the complain claims. “Mr. Schnatter is entitled to find out whether or not his fellow administrators have been grossly negligent or are appearing in dangerous religion, or each.”

The grievance states that Schnatter ought to be capable to examine the “books and data” at Papa John’s, arguing he has “unfettered rights” to take action.

Garland Kelley, an legal professional for Schnatter, stated they’re in search of entry to communications “amongst and between board members and attorneys.”

Papa John’s stated in a press release that it’s offering Schnatter with “the entire supplies he’s entitled to as a director.”

“We is not going to let his quite a few misstatements within the grievance and elsewhere distract us from the essential work we’re doing to maneuver the enterprise ahead,” the assertion says.

— CNN’s Rob McLean contributed to this report.

CNNMoney (New York) First printed July 26, 2018: three:29 PM ET

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