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Papa John's founder John Schnatter says resignation 'was a mistake'

4 years 2 months 1 week ago Wednesday, July 18 2018 Jul 18, 2018 July 18, 2018 1:55 PM July 18, 2018 in News
Source: ABC News

The founder of Papa John's said he made “a mistake” when he agreed to step down as chairman of the company’s board last week amid “mischaracterized” reports about his use of a racial slur earlier this year.

In a letter addressed to members of the company's board, pizza chain founder John Schnatter said board members pressured him to resign without "any investigation" and based its decision on “rumor and innuendo.”

“The board asked me to step down as chairman without apparently doing any investigation. I agreed, though today I believe it was a mistake to do so,” Schnatter said, according to a copy of the letter obtained by ABC News on Tuesday. “I have checked with corporate governance experts who tell me that this was not a proper action by the board.”

Patty Glaser, an attorney representing Schlatter to the board, wrote in a separate letter on July 15 that the “board had no authority to remove Mr. Schnatter as a director” and called for “an independent investigation and fully inform itself as to what actually occurred.”

Glaser warns that “the failure to conduct a complete and independent investigation” would render “individual Board members liable for all resulting harm to the Company and to Mr. Schnatter.”

Schnatter faced fierce backlash last week after Forbes reported that he used the N-word during a May conference call while discussing the national anthem protests in the NFL.

“Colonel Sanders called blacks n------,” Schnatter said, referring to Kentucky Fried Chicken founder Harland Sanders, according to the Forbes report.

Schnatter apologized for the remarks last Wednesday and agreed to step down as Papa John's chairman just a few hours later.

He also resigned from his position on the University of Louisville’s board of trustees last week, according to the school. He had served on the board for two years.

The Kentucky-based pizza chain had been testing advertisements to see if Schnatter should be reintroduced "with significant success," according to his letter to the board, but the company seems to be reconsidering that relationship now.

“Racism and any insensitive language, no matter what the context simply cannot -– and will not -– be tolerated at any level of our company,” CEO Steve Ritchie said in a statement over the weekend. “It has also been decided he will no longer be in any of the advertising or marketing materials associated with the brand.”

Schnatter, currently the company's largest shareholder, didn’t disclose details on the current status of the relationship in the letter.

He accused the company of lacking the ability to “handle a crisis based on misinformation.”

“The corporate governance experts with whom I consulted said this is not the proper action of either a director or the board,” the letter said. “I am confident that an examination of the facts will bear out what I have written in this letter and show that once again our company has demonstrated that it does not know how to handle a crisis based on misinformation.”

Schnatter, 56, stepped down from his role as CEO late last year after saying NFL players should stand for the national anthem and that their protests had hurt the company’s sales. Those comments had precipitated his initial removal from advertisements.

He is still a member of the company’s board.

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