OC Investors to Pay Off Loan for Karcher

Four Orange County investors, led by title insurance industry executive William P. Foley II, have agreed to pay off a $4.8-million bank debt for Carl N. Karcher, a move that should ease the fast-food magnate’s personal financial crisis.

The deal, which could be completed as soon as today, calls for the investors to take control of 641,000 shares of Carl Karcher Enterprises that Karcher had pledged as collateral to Commercial Center Bank in Anaheim for the loan. Foley said in an interview that the investors are acting separately, not in concert.

The investors came forward just one day after the bank’s deadline to sell at least 600,000 of the shares--representing about 10% of Karcher’s holdings in the parent of the Carl’s Jr. restaurant chain--unless Karcher repaid the loan that is in default.

It was uncertain Wednesday whether the investors would side with Karcher in his increasingly bitter feud with Karcher Enterprises’ board over the company’s strategic direction. Board members removed Karcher as chairman two weeks ago after his threat to initiate a proxy fight for control of the company.

Foley, chairman of Fidelity National Financial Inc., an Irvine title insurance company, said the transaction was approved by Karcher. He said he will buy 400,000 of the shares--worth a little more than $3 million at Wednesday’s closing price--with the remainder distributed among three investors.

Other investors are Richard Pickup, a broker with Wedbush Morgan Securities in Newport Beach, who already holds more than a million shares of Carl Karcher Enterprises; businessman Rod Lane, and William Davenport, a broker with Kidder Peabody in Newport Beach.

In Nasdaq trading Wednesday, Karcher Enterprises’ share price fell 37.5 cents to close at $7.625.

Foley described the stock acquisition as an investment. “I hope I can help to facilitate a reconciliation between Carl and the board.”