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'Poison Pill' Presents An Uphill Battle For John Schnatter To Reclaim His Seat As Chairman

The things you love the most turn out to be the ones that hurt you in the end. And Dropping the N-word.

At one point in time, Schnatter had everything a man could dream to have in his life. A yellow Camaro that he used in commercials to look cool/ battle his mid-life crisis, a name atop the stadium that hosts college football's greatest dynasty: the Louisville Cardinals, a cushy relationship with the NFL, and an up-close view of Peyton Manning's monstrosity of a forehead. He had it all. Then like many mediocre humans before him, he let a racist term slip out in the workplace.

But if you ask John Schnatter about this situation, he hasn't done anything wrong and the Papa John's Board is taking this all way too far

Mr. Schnatter has said since stepping down that doing so “was a mistake” and that he was pressured to leave by board members acting on “rumor and innuendo.”

The poison pill strategy — which has been used by, among others, Avis, Netflix and Sotheby’s, and in a battle between Men’s Wearhouse and Jos. A. Bank — is typically employed to fend off takeover efforts by activist investors and acquisitive rivals. It has rarely been used to preemptively rebuff a company founder, one notable exception being the poison pill that American Apparel adopted in 2014 amid an acrimonious split with its founder, Dov Charney.

And Schnatter is going to battle till the end

A lawyer for Mr. Schnatter, Patricia Glaser, said he “is not going to go quietly into the night.”

However, Schnatter will be battling uphill. The CEO stated that he isn't racist and he used the N-Word to prove he wasn't racist. Similar to how Donald Trump speaks so endearingly about women to show how much he respects them. But unlike Trump, Schnatter made the fatal mistake of saying offensive things in 2018. Had this debacle unfolded in the early 2000's, Schnatter could sit perched atop the throne of cardboard boxes and stale crusts from his office in Louisville Kentucky with only minor backlash. He could have resolved the entire situation by going on Oprah, but as luck has it, Ms. Winfrey no longer has a show, and the public is much less tolerant of racial slurs. Most would argue the latter is a good thing and shows progress as a society, but all it means for Schnatter is pain and suffering.

For Schnatter to reclaim his crown as chairman and to clear his name, he'll need to complete a hostile takeover

Ms. Glaser declined to comment on the poison pill move by Papa John’s, which would take effect if Mr. Schnatter and his affiliates raised their combined stake in the company to 31 percent or if anyone were to buy 15 percent of the common stock without the board’s approval.

Annnnddd it looks like it's not gonna happen anytime soon.

I guess the only move for Schnatter from this point is to make hats with a catchy slogan and announce his bid to run for office.

Papa John’s Adopts ‘Poison Pill’ Defense Against John Schnatter [New York Times]



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