Karcher and Associate Close to Ending Dispute
Restaurant baron Carl N. Karcher and longtime friend and business associate Maurice Monnig are close to resolving a legal dispute stemming from a failed residential home-building business in San Bernardino County.
Details of the plan will remain confidential, attorneys for both men said Thursday, but the settlement could be completed within a few weeks. The agreement apparently will lead to the dismissal of lawsuits that the two men had filed against each other, including one that was scheduled to go to trial Monday in Superior Court in San Bernardino County.
The two businessmen traded lawsuits after Monnig Development Co.--run by Monnig and financed in large part by Karcher--failed in the early 1990s, along with several related partnerships. Monnig had alleged that Karcher failed to contribute promised funds, while Karcher complained that Monnig hadn’t been truthful about how funds were being used.
“It’s good that it’s at least behind us now,” Monnig said Thursday. “We can both go forward now. It’s been a very difficult time in residential real estate development . . . and the complications of this disagreement only added to the difficulties.”
Andrew F. Puzder, Karcher’s attorney, said the parties are “close to settling it, but it’s premature for me to discuss the agreement.”
Monnig, 53, has known the Karcher family since attending grade school during the 1950s with one of Karcher’s daughters in Anaheim. He now lives in Palm Desert, where he serves as a real estate industry consultant.
Karcher, who founded the Carl’s Jr. burger chain, has been struggling for the past two years to right personal finances that were drained by ill-advised investments and the real estate downturn that stalled Southern California economy during the early 1990s.
Karcher has successfully restructured millions of dollars in debt, but in the process has been forced to sell a controlling interest in CKE Restaurants Inc., the Anaheim-based parent company of the Carl’s Jr. chain. Karcher still faces debts that his personal financial advisors have described as severe enough to push him into bankruptcy. Karcher thus far has rejected that option.
In this case, San Bernardino-based Monnig Development Co. built about 1,700 moderately priced homes before running out of money in the early 1990s. Over the years, Karcher poured more than $13 million into the development company.
The agreement now being formulated “should resolve all present and future disputes between them,” said Monnig attorney Greg Eriksen. “We’ve got a verbal agreement now, but I think we’ll be able to dismiss the cases in a few weeks, after we’ve hashed out the paperwork.”
Monnig Development was one of many Southern California home builders that ran into serious financial difficulty during the late 1980s and early 1990s when the market for new homes stalled. Monnig Development has since gone out of business and several partnerships that were run by Monnig and funded in part by Karcher have been dissolved.
Developments that the company had underway when it encountered financial difficulties are, for the most part, in foreclosure, Eriksen said.
