John Schnatter, the ousted founder of pizza chain Papa John’s, is suing his former company.
In a lawsuit filed in Delaware Chancery Court on Thursday, Schnatter’s lawyers say he is seeking to inspect company documents “because of the unexplained and heavy-handed way in which the company has treated him since the publication of a story that falsely accused him of using a racial slur.”
Papa John’s denied Schnatter’s claims in a statement. The company said it was “saddened and disappointed” by the lawsuit, which it called “needless and wasteful.”
Schnatter has admitted he said the N-word on a conference call with a marketing firm. Schnatter claimed the firm asked if he was racist, and he used the N-word in describing how KFC’s Colonel Sanders used to talk. Schnatter has since said he also told the firm that he himself wouldn’t ever use that word.
The company asked him to resign as chairman of the board, which he did, though he remains on the board as a director. He owns 29% of Papa John’s (PZZA) stock.
Schnatter has since said he regrets stepping away from the company. He also accused the board of not “doing any investigation” and said its decision to remove him as chairman was based on “rumor and innuendo,” according to a letter he sent to the board earlier this month.
The board of directors recently approved a so-called poison pill provision, an extraordinary step aimed at preventing the former CEO from gaining more control of the company.
