Papa John sues Papa John’s

Posted at 4:30 PM, Jul 26, 2018
and last updated 2018-07-26 16:30:09-04

John Schnatter, the founder of Papa John’s.

John Schnatter, the ousted founder of pizza chain Papa John’s, is suing his former company.

In a lawsuit filed in Delaware Chancery Court on Thursday, Schnatter’s lawyers say he is seeking to inspect company documents “because of the unexplained and heavy-handed way in which the company has treated him since the publication of a story that falsely accused him of using a racial slur.”

Schnatter has admitted he said the N-word on a conference call with a marketing firm. Schnatter claimed the firm asked if he was racist, and he used the N-word in describing how KFC’s Colonel Sanders used to talk. Schnatter said he wouldn’t ever use that word, despite having just said it.

The company asked him to resign as chairman of the board, which he did, though he remains on the board as a director. He owns 29 percent of Papa John’s stock.

Schnatter has since said he regrets stepping away from the company. He also accused the board of not “doing any investigation” and said its decision to remove him as chairman was based on “rumor and innuendo,” according to a letter he sent to the board earlier this month.

Papa John’s has removed Schnatter from its commercials and marketing materials and kicked him out of office space at its headquarters.

The board of directors also approved a so-called poison pill provision, an extraordinary step aimed at preventing the former CEO from gaining more control of the company.

Papa John’s did not immediately comment.