John Schnatter, the disgraced former CEO of Papa John’s International Inc., might finally be cutting ties with the pizza company he founded.
According to an SEC filing Monday, Schnatter has enlisted the aid of financial advisers to help sell all or part of his 31% majority stake in the Louisville, Ky.-based pizza chain.
The move would mark further separation of Schnatter and the company, which have been mired in legal battles and public relations problems for a year and a half as Schnatter’s influence at the company waned.
Schnatter stepped down as CEO in December 2017 following a controversial comment during an earnings call in which he blamed NFL protests for his company’s struggles. Last summer, reports of racist language and behavior, including use of racial slurs during a media meeting, led to his resignation as executive chairman. Last month, he agreed to exit the company’s board.
The company, meanwhile, has been working to distance itself from Schnatter and to regain the trust of investors and customers.
In February 2019, Papa John’s announced a $200 million investment from hedge fund Starboard Value LLP and subsequent rejection of a similar offer from Schnatter. The following month, Schnatter reached a settlement with his former company, agreeing to drop all legal claims against Papa John’s, including a lawsuit that had sought to nullify the “wolfpack” provision part of the poison pill agreement that prevented him from working with potential Papa John’s buyers.
“I founded Papa John’s, built it from the ground up and remain its largest shareholder,” Schnatter said at the time in a statement. “I care deeply about its employees, franchisees, and investors and am thankful that I’ve been able to resolve these important issues, and that we can all focus on the company’s business without the need for additional litigation.”
Schnatter also agreed to help name a successor after leaving the board.
“Mr. Schnatter’s term as a director expired at the annual meeting of stockholders that was held on April 30, 2019,” Monday’s SEC filing clarified. “Mr. Schnatter and [Papa John’s] have engaged in discussions regarding candidates for such role, but no decision has been made to appoint any such candidate to the board of directors.”
Papa John’s will be filing its first quarter results after the closing bell on Tuesday.
As of Dec. 30, Papa John’s has 5,303 locations worldwide.
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