Papa John's Pizza founder John Schnatter is suing his former company in order to gain access to the pizza chain's records and books, specifically to conversations among board members and between board members and lawyers. Schnatter claims that the company's board treated him in an "unexplained and heavy-handed way," according to the complaint filed in the Delaware Chancery Court on Thursday.
The drama comes after the Papa John's International, Inc. board of directors asked Schnatter to resign as chairman after Schnatter used a racial slur during a media training session, an event which Schnatter admits happened. However, he claims that he only used the N-word during the conference call to describe how another fast-food chain founder talked and that he himself would never use that word.
Schnatter was also asked to step down as the company's chief executive late last year after blaming slow sales on the controversy surrounding National Football League (NFL) players kneeling during the national anthem to protest police misconduct and societal inequality.
Schnatter is still a member of the company's board and owns 29 percent of the stock in the company. The Papa John's board recently approved a "poison pill" rule which would prevent him from regaining a controlling stake in the company.
The lawsuit alleges that the board either did not do a complete investigation following the publicity around the racial slur story or that they were looking for an excuse to push the company's founder out.
The court filing states, "Either the purportedly independent directors acted without adequate information and breached their duty of care..." or they "planned this coup in advance. Either way, as a director of the company, Mr. Schnatter is entitled to determine whether his fellow directors have been grossly negligent or are acting in bad faith or both."
Papa John's responded to the lawsuit in a statement saying that Schnatter had filed "a needless and wasteful lawsuit in an attempt to distract from his own words and actions." They said that they had provided Schnatter with all the company documents he has the right to see as a director and board member.
Over the last few months, the company has removed Schnatter's image from all its printed marketing materials and commercials, plus they took away his office space in the company's Louisville, Kentucky, headquarters building.
