John Schnatter, the founder of Papa John’s, is going to resign the board of directors. Schnatter exit came as a part of a settlement to solve an unpleasant dispute for control of the company. Papa John’s is the world’s third-largest pizza chain.
On Tuesday, in a regulatory filing, the company has stated that it is finding a mutually acceptable independent director with the cooperation of Schnatter. The new director would not be allied with the founder or owns about 10 percent in the restaurant chain’s stake. Currently, Schnatter owns about 30 percent shares in Papa John’s. As per the company, Schnatter would leave from his position if the company appoints an independent director before the May’s annual stockholder meeting. Last summer, Schnatter stepped down from the chairman’s position.
In the past, Schnatter has filed litigations against the company in an attempt to get back the control of the company that he founded. In January, the court ordered the board to give Schnatter some internal documents. As per the regulatory filing, recently Schnatter has submitted a letter nominating himself again for the board. According to the agreement, the company has agreed to share all of the company’s records with Schnatter and in return, he confirmed to take the lawsuits back that he filed against the company. Schnatter stated that he is grateful that he has been able to resolve the issues without any need for any other litigation and now everyone can focus on the business. The company has agreed to give up the necessity that Starboard vote in the indulgence of the mandatory board. Last week the company stated that in 2018, the sales fell 7.3 percent in the North American same-restaurant and it would lag in the first half of 2019 as well. The company’s shares were up almost 3 percent in the recent trade.