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John Schnatter, the former CEO of Papa John's International Inc., has filed a lawsuit against the company in response to a $ 200 million investment made earlier this month by the Starboard Value LP hedge fund.
The amended Schnatter lawsuit, filed under the Chancery Court of Delaware, seeks to overturn the "wolf bag" provision under the poison pill agreement that prevents it from working with potential buyers of the company he founded.
The parties have stated that the amended dispute, which is not currently available to the public, calls for the reversal of a new corporate policy that requires new investors to vote in favor of the public. Privileged directors of Papa John and prevents shareholders from holding "any substantive discussion" about Papa John's.
Schnatter, who remains a member of Papa John's board of directors and is the company's largest shareholder with about 29% of the capital, in an earlier statement on the so-called poison pill, said the "wolfpack" provision does not was not in accordance with Delaware law.
"The former board has taken many steps to retrench and today's action seeks to remedy this irregular conduct," said Schnatter's lawyer Garland A. Kelley.
Despite the fact that Papa John's rejected Schnatter's offer to invest in a similar Starboard offer, led by CEO Jeffrey Smith, Schnatter said he "welcomes" the outside help likely to enhance the reputation of the company:
"Mr. Schnatter welcomes the comments of Mr. Smith and the company over the past few days," said Kelley. "Indeed, today's amended trial demonstrates his support for Mr. Smith and his intention to reinvigorate the company for the benefit of all shareholders. "
Schnatter recently won a decision in the ongoing legal battle with Papa John's when a Delaware judge ordered Papa John's's council in January to release internal documents and communications relating to the departure of the company's founder.
The dispute began last July when Schnatter resigned from his presidential post after learning that he had made racist remarks at a meeting with the press agency of the TV channel. pizza.
Shares of Papa John's fell nearly 3 percent on Tuesday to about $ 44 at the noon trading session following the announcement of the ongoing dispute between Schnatter and its former company.
The pizza chain did not immediately respond to the request for comment.
Papa's John's is the third largest pizza company in the country with 5,247 establishments worldwide in September.
Contact Joanna Fantozzi at [email protected]
Follow her on Twitter: @JoannaFantozzi
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