Bank Sues Carl N. Karcher Over Alleged Default on $575,000 Loan

Carl N. Karcher, who last week arranged to raise $10 million in cash by selling stock in the parent company of the Carl’s Jr. fast-food chain, was sued Wednesday by Wells Fargo Bank for defaulting on a $575,000 loan.

The suit, filed in Orange County Superior Court in Santa Ana, alleges that the Carl N. and Margaret N. Karcher Trust has not made monthly payments on the loan since December. Karcher is listed as trustee.

Wells Fargo’s suit lists the loan’s outstanding principal as $467,000 and accrued interest of $11,799.71.

The bank’s lawsuit also seeks attorney fees and other related costs.

Karcher, founder and chairman of Anaheim-based Carl Karcher Enterprises, would not comment last week on how badly the stalled Southern California economy has affected his financial fortunes.

However, Karcher Enterprises’ President Donald E. Doyle said in a statement released last week that the founder would use the $10 million to “fulfill certain outstanding financial obligations.”

Earlier in the year, a notice of default was filed on a vacant tract near the company’s Anaheim headquarters that is owned by the Karcher Trust.

And, according to federal Securities and Exchange Commission documents, Karcher in March was obligated to pay off a promissory note on land that is secured by Karcher Enterprises’ corporate headquarters.

The note had an estimated unpaid principal of $4.3 million.