Papa John's: John Schnatter defied orders, lied about CEO concerns

A special committee of Papa John’s board of directors accused former chairman and CEO John Schnatter of repeatedly defying its instructions and lying about his dealings with upper management in a scathing open letter, escalating a war of words between the two sides.

“John Schnatter is promoting his self-interest at the expense of all others in an attempt to regain control,” the letter reads. “John Schnatter is harming the Company, not helping it, as evidenced by the negative impact his comments and actions have had on our business and that of our franchisees.

The committee accuses Schnatter of various infractions both during and after his time as chairman and CEO of Papa John’s, dating back to his public criticism last fall of the NFL’s handling of national anthem protests. Schnatter purportedly ignored the board’s specific instructions not to blame a quarterly sales slump on the NFL, which was the company’s leading corporate partner at the time.

The letter also addressed allegations Schnatter recently made in communications posted to his website, SavePapaJohns.com. The board denied Schnatter’s claims that he was asked to become executive chairman amid concerns about the leadership of Steve Ritchie, his successor as CEO.

The board also rejected Schnatter’s assertion that some of its members agreed with him that Ritchie “needed to go,” adding that Schnatter violated company rules by meeting with another restaurant company without Ritchie.

Schnatter also accused the company of withholding evidence of sexual misconduct within Ritchie’s “inner circle.” The board’s post did not directly address that allegation.

Schnatter stepped down as chairman of the board in July after evidence surfaced that he had used a racial slur during a conference call with executives from the marketing agency Laundry Service last May. Schnatter apologized for the incident, but later claimed Laundry Service had attempted to extort him for $6 million and ripped the board for pushing for his resignation without conducting a shareholder vote.

The resignation kicked off an ongoing public dispute between the two sides, with Schnatter repeatedly accusing the board of mismanagement. Papa John’s executives, in turn, said its sales fell 10 percent last July in the days after Schnatter’s remark went public.