Battle for Control of Carl’s Jr. Still Looms as Karcher Seeks 2 Board Seats for Allies

A battle for control of the Carl’s Jr. fast-food chain continues to loom despite peace overtures made earlier this week by an investor group that has allied itself with embattled founder Carl N. Karcher, according to documents filed Friday.

Karcher is still pursuing an “amicable” settlement of his differences with the Carl Karcher Enterprises board that pushed him out as chairman Oct. 1, according to documents filed with the Securities and Exchange Commission.

But Karcher, in his filing, also threatened to start a shareholder fight if the company doesn’t hire him back as chairman emeritus and give his allies two seats on the board at its scheduled meeting Wednesday.

In a separate SEC filing, the investor group led by title insurance executive William P. Foley II said it will “consider alternatives” if it isn’t given two board seats.

The group wants Foley and Newport Beach resident Daniel D. (Ron) Lane to join the board, and it wants one current Karcher Enterprises board member to resign. The group also backs Karcher’s bid to return as chairman emeritus.

Foley said in an interview Friday that the board has not yet agreed to add him and Lane to the board and has been “uncooperative” in talks about Karcher becoming chairman emeritus, but he stopped short of saying that he would initiate or support a proxy fight for board seats. He has said previously that he wants to be a mediator between the board and Karcher.

Karcher Enterprises spokesman Roger Pondell on Friday declined to comment on the filings or the company’s Dec. 8 agenda.

The filings are part of a complicated deal that is designed to help Karcher restructure his troubled personal finances.

Foley’s group has agreed to pay off a delinquent $26-million personal loan to Karcher from Union Bank. In return, Karcher would transfer to the partnership the 3.9 million shares he used to guarantee the loan.

Karcher, Foley and other investors involved in the deal on Friday signed a letter of intent to pay off the Union Bank loan and acquire the shares, which represent 22% of the company’s stock. When coupled with shares owned by Karcher and other allied parties, the group’s voting block could swell to 40% of the company’s shares outstanding.