Papa John's international founder John Schnatter is delighted with the hedge fund Starboard Value LP's investment in the pizza restaurant chain, his lawyer said, even though he granted an updated lawsuit on Monday against the company.
This month, Papa John unveiled the starboard investment of up to $ 250 million and named the fund's CEO, Jeff Smith, as his leader.
Schnatter, who according to Refinitiv data owns about 30 percent of the company he founded in his father's bar, served as a leader until last summer. He retired after he had used a racial slam on a media training conference call, a decision he said he regretted. He had resigned as CEO in December 201
Schnatter, who is still a member of Papa John's board, has tried to gain more control over the chain. With the starboard steering, the number of board members jumped to nine from six, diluting his influence.
"Mr Schnatter is delighted with the comments of Mr. Smith and the company in recent days," said Schnatter's lawyer Garland Kelley said in a statement. "Today's amended trial reflects support for Mr. Smith and his plans to strengthen the business for the benefit of all shareholders."
In his amended lawsuit filed under the seal of the Delaware Criminal Court, Schnatter is attempting to repudiate a new provision on a voting agreement between Papa Johns and the starboard that requires the hedge fund, in line with the company's shares in favor of Papa John's preferred board members.
"Such a provision serves only one purpose, to further anchor the previous board, one that has repeatedly proved its willingness to place its own interest in shareholders," Schnatter said in a statement.
Schnatter also continues to challenge The poison pill Papa Johns adopted last year, which he says prevents him from having discussions about the restaurant chain with other shareholders. The lawsuit was first filed in August.