The founder of Papa John's has filed a lawsuit against the company, its board of directors and CEO in the latest twist in the drama surrounding the pizza chain.
John Schnatter filed the lawsuit in Delaware's Court of Chancery asking the court to help stop what he sees as irreparable harm being done to the company.
Schnatter stepped down as chairman last month after admitting to using a racial slur during a conference call in May. He remains a board member and the Louisville, Kentucky-based company's biggest shareholder, however, and now regrets resigning, saying his words had been taken out of context.
The complaint filed Thursday is sealed. But a statement from Schnatter's representatives says the lawsuit claims CEO Steve Ritchie and the board of Papa John's International Inc. are harming the company by "their repeated, and ongoing, breaches of the duties of loyalty and care" owed the company.
Papa John's says it will fight Schnatter's lawsuit, which it says is without merit.
"John Schnatter will do anything to distract attention from the harm caused by his inappropriate words," the company said. "He continues to make reckless allegations in his attempt to regain control and serve his own interests."
The lawsuit is the second filed by Schnatter in the court in Delaware, where Papa John's is incorporated. He is also suing to gain access to the company's books and records in a complaint where he accuses the company of treating him in an "unexplained and heavy-handed way."
Steve Ritchie took over asafter Schattner stepped down after blaming disappointing sales on the NFL's handling of player protests during the national anthem. The chain has since moved to scrub Schnatter's image from its marketing materials as it tries to distance itself from the man who founded it in 1984.
Ritchie has publicly addressed the controversy, tweeting that the franchise is focused on improving diversity and inclusion efforts. "I've been listening along with my team members. I've heard their hurt, disappointment and anger, and that of our franchisees, our customers—and those who used to be," Ritchie wrote.
The chain's business, meanwhile, has sufferedwith its founder. In July, Papa John's slashed its sales outlook for the year after reporting a third straight quarter of sales declines in North America.
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