Karcher’s Bid to Raise Cash Is Back on Track : Finance: Fast-food chain founder wants to sell three of five restaurants he owns.

A stalled bid by Carl N. Karcher to raise cash by selling three Carl’s Jr. restaurant locations is apparently back on track.

Karcher, who owns five Carl’s Jrs. that are leased back to parent company Carl Karcher Enterprises Inc., wants to sell three of those restaurants for $1.9 million to help generate cash and ease a personal money crisis.

Karcher, who founded the Anaheim-based fast-food company in 1941, is struggling with financial woes driven by soured investments and the weak Southern California real estate market. In recent weeks he has defaulted on about $30 million in personal loans.

Karcher spokesman Steven Fink said Tuesday that the restaurant deal stalled in late September, just before the Karcher Enterprises board of directors ousted Karcher as chairman. Fink said the company tied the restaurant sale to a package that included a guaranteed salary for the founder, an ongoing role as chairman emeritus and a $16-million stock repurchase.

Karcher rejected the entire package, Fink said, in part because the company wanted rights to vote Karcher’s company stock, which at that time amounted to about 34% of the outstanding shares. “They tied the (restaurant) sale to Carl going quietly,” Fink said.

Karcher has since turned over control of 641,000 shares of Carl Karcher Enterprises stock--3% of his company shares--to four Orange County businessmen, who in turn paid off a delinquent $4.8-million bank loan for which Karcher had pledged the stock as collateral. Karcher is still trying to negotiate an agreement with Union Bank on a $25.1-million loan that is now in default.

Karcher learned Monday afternoon that the restaurant sale plan is back on the table, Fink said. “We’re glad to see it moving forward,” he said. “Our position is that the deal was independent and should go forward regardless of what’s happening with Carl.”

The company first authorized the restaurant acquisition in January, according to Securities and Exchange Commission filings. A company spokeswoman on Tuesday would not comment on the planned sale, other than to say that negotiations are continuing.

The restaurant proposal illustrates how intricately Karcher’s personal finances are tied to those of the company.

During the fiscal year ended Jan. 31, the founder received $432,800 in rent for the five restaurants, according to SEC documents. For the same year, the company also paid him $1.07 million in rent for its corporate headquarters building in Anaheim. In addition, Karcher received $75,000 in rent for a pair of nearby lots and $49,632 for space leased by the company in San Diego, according to SEC documents.

Karcher also drew about $500,000 in dividend payments on his 6 million shares, as well as a $407,235 salary as board chairman.

When the founder was replaced as chairman earlier this month, however, his annual compensation was cut to $200,000 in retirement pay.

That contrasts sharply with the income that he would have received under an ill-fated buyout proposal last year that would have taken the company private. Karcher was supported in that deal by Freeman Spogli & Co., a Los Angeles-based investment firm.

The company’s board rejected the proposal, which would have taken the company private at $9.50 a share, saying that the offer was too low.

Had it gone through, according to SEC filings, the deal would have left intact Karcher’s $400,000 chairman’s salary. The founder also would have received eight weeks of paid vacation, an automobile allowance, continued use of his office at the corporate headquarters and an administrative assistant.

According to the SEC filings, the deal also called for the company to provide space at its headquarters for Karcher’s family trust and to pay salaries of the trust’s director and an administrative assistant.

Adding to Karcher’s financial woes, he now also faces the likelihood that he will not be reelected to the company’s board when his term expires. In a recent SEC filing, Karcher said the board expects him to vacate his seat at the June, 1994, shareholders meeting after “a successor has been elected and qualified.”

The corporation has made clear that it is distancing itself from the founder. The board recently directed Karcher to contact a company security guard before visiting the headquarters building that he owns.

Since being removed as chairman, however, Karcher has not returned.

“I don’t believe he wanted to go through the humiliation, after 52 years of service to the company, of getting a security guard to unlock his office,” Fink said.