Lawyer Says Stock Buyback Would Limit Karcher : Management: Company had offered to purchase $10 million in shares from restaurant-chain founder.
Carl Karcher Enterprises’ canceled offer to buy back $10 million in stock from the company’s founder and chairman was designed to severely limit Carl Karcher’s role at the company, Karcher’s personal attorney said Thursday.
Karcher Enterprises’ offer to purchase some of the Karcher family’s 6.1 million shares was contingent upon Karcher turning over “proxy-like control” of his remaining shares to company management, said Andrew F. Puzder.
Had Karcher sold about a fifth of his 6.1 million shares he would have been able to cast votes on “officers, directors (and) those sorts of things, but not change-of-direction issues,” Puzder said. “And Carl wasn’t going to sit still for that.”
It was a controversial change in direction that prompted Karcher this week to initiate a proxy fight to regain control over the parent company of the Carl’s Jr. restaurant chain, which has 648 company and franchise locations.
Karcher, 76, publicly broke ranks with the company on Tuesday after board members rejected his proposal to test market Mexican-style entrees supplied by Anaheim-based GB Foods’ Green Burrito restaurants. Karcher has described the test as an essential step in restoring the value of company stock as well as his own flagging fortunes.
Officials at Karcher Enterprises declined comment Thursday on Karcher’s contention that the aborted stock buy-back plan would have slapped severe limits on his role in the company he founded 52 years ago.
Analysts said that restaurant sales shouldn’t be hurt by the unusual public feuding at Karcher Enterprises because few consumers “care about infighting within a corporation,” said Janet Lowder, a Rancho Palos Verdes-based restaurant industry consultant. “It’s not something that affects them, unless the food suffers, the restaurants aren’t clean or the service suffers.”
Karcher Enterprises stock was unchanged at $9.625 Thursday in NASDAQ trading.
Inside the business of entertainment
The Wide Shot brings you news, analysis and insights on everything from streaming wars to production — and what it all means for the future.
You may occasionally receive promotional content from the Los Angeles Times.
