Papa John's Founder Resigns From Company's Board and Drops Lawsuits

Earlier in the month, the fast food pizza chain Papa John's and its founder John Schnatter finally came to an agreement whereas Schnatter resigned from his role on the board of directors.

He also dropped two pending lawsuits he filed against the company.

Schnatter had accused the company of trying to limit his control, specifically one suit was "filed over a “poison pill” the company implemented last summer in an effort to prevent him from gaining majority control; Papa John’s will remove an element of the plan that restricted Schnatter's communications with other shareholders," writes "Forbes."

In late 2017, Schnatter stepped down as CEO after the backlash he received from his public statements criticizing the NFL for how the organization handled the controversial athlete protests.

Later in the year, "Forbes" reported that he made offensive comments and racial slurs on a media-training call. He then abruptly resigned as chairman.

The pizza restaurant's shares quickly dropped, causing the pizza chain to look to secure a buyout. The fund Starboard Value instead invested $200 million into the chain and its CEO Jeffrey Smith took on the chairman role.

Schnatter released a statement at the time saying he was happy with the agreement and that Starboard was to "help Papa John’s regain its strength and market position.”

This legal battle, for the time being, has come to an end. Schnatter still owns about 30 percent of the company's stock and as his spokesmen said he “retains his ability to assert new legal claims.”

“I founded Papa John’s, built it from the ground up and remain its largest shareholder,” said Schnatter. “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.”

The host of The Barron Report Paul Barron addresses the legation agreement in this episode. Watch the video above to learn more about Papa John's legal challenges.