Bank Sues, Seeks to Foreclose on Karcher Properties : Courts: Lawsuit contends restaurant-chain founder breached terms on $2-million loan. Action is latest in setbacks for businessman.
Adding to the financial woes of Carl N. Karcher, a bank filed a lawsuit Wednesday to foreclose on several Southland properties owned by Karcher.
Pioneer Bank said in the suit, filed in Orange County Superior Court in Santa Ana, that the founder of the Anaheim-based Carl’s Jr. fast-food restaurant chain failed to adhere to terms of a $2-million loan he took out earlier this year. The suit states that the Carl and Margaret Karcher Trust, which Karcher administers and which holds the couple’s personal fortune, failed to present quarterly financial statements and a plan for liquidation of collateral as required as a condition of the loan.
Because the trust failed to meet its obligation, the bank says in its suit, Karcher and other defendants have defaulted on the remaining $1.7 million owed on the $2-million loan. As a result, the suit states, the bank is entitled to sell properties put up as collateral.
The California properties are in San Clemente, Bell in southeast Los Angeles County, Ventura County and the San Bernardino County town of Yucaipa. Another property is in Waco, Tex.
The Bell property is the site of a Carl’s Jr. restaurant, one of the chain of 650 that Karcher ran until being deposed as chairman Oct. 1 by the directors of parent company Carl Karcher Enterprises.
Karcher’s lawyer and his financial adviser, both contacted late Wednesday, downplayed the lawsuit.
“This is a bank trying to make itself look good in some regulator’s eyes. As far as I recall, we settled with them,” lawyer Andrew F. Puzder said.
Financial adviser Edward Pasquale said that Karcher took out the loan on March 1 to pay off other debts.
Karcher was the guarantor of several investments made by Monnig Development Inc., an Inland Empire real estate company that is also named as a defendant in the lawsuit. Several partnerships are also named.
The lawsuit is the latest development in an ongoing struggle by Karcher to regain control of the company he founded in 1941 while trying to solve financial problems related to soured investments. In recent weeks he has defaulted on about $30 million in personal loans.
