ANAHEIM — Carl N. Karcher on Wednesday disavowed a strongly worded press release issued by his own spokesman that says the fast-food legend intends to re-establish himself in a "dominant" role at the Carl's Jr. chain.
The release, distributed to several newspapers by Karcher public relations specialist Steven Fink, stated that at least one Carl Karcher Enterprises board member will resign. It also indicated that an investor group helping Karcher restructure his troubled personal finances will gain three seats on the Karcher Enterprises board.
Fink did not return a telephone call seeking additional information but did issue a two-paragraph "clarification" stating that "discussions with the board continue on a recomposition of the board of directors and future marketing strategies."
Andrew Puzder, Karcher's personal attorney, said the press release "shouldn't have gone out. It's simply wrong."
Puzder denied that Karcher has any knowledge of directors planning to resign. He said the issue of board representation is a matter to be negotiated by the investor group helping Karcher settle a potentially devastating personal debt--not Karcher individually.
Members of the group said they never intended for Karcher to rejoin the company in a dominant role.
"We do envision some active role . . . possibly as chairman emeritus," said Frank Willey, one of several investors who on Tuesday agreed to help Karcher restructure a delinquent $26-million personal loan from Union Bank. "But we don't have any agreement with the board" of Carl Karcher Enterprises.
Donald E. Doyle, president of Karcher Enterprises--who has drawn Karcher's wrath in recent months--said Wednesday that any discussion of Karcher's return to the company would be premature. "We don't have a final deal yet," Doyle said, "so we need to wait and see what happens."
The investor group could face an uphill battle in its attempt to reunite the fast-food company and Karcher, who has said he might solicit shareholder support to oust three of Karcher Enterprises' board members--including Elizabeth A. Sanders, who replaced him as chairman.
Late last week, Karcher accused Doyle of making "unfair, inaccurate, misleading,untrue . . . (and) simply false" statements about him. Karcher also demanded that Doyle "publicly admit that (Doyle's) statements were false."
And Wednesday's press release reiterated Karcher's demand that Doyle "stop spreading false statements" about him.
The deal announced Tuesday helps Karcher resolve his most troublesome financial difficulties while allowing him to maintain a presence at the company he founded in 1941 and helped promote in TV commercials. A partnership led by William P. Foley II, chairman of Fidelity National Financial Inc. in Irvine, will gain control of 3.9 million Karcher Enterprises shares that the founder used to secure the Union Bank loan.
Karcher will have a 15% stake in the partnership, a Karcher spokesman said, and will have some influence over how its shares are voted.
Karcher, like many wealthy Southern Californians, has been stung by ill-fated investments in real estate and in companies that subsequently fell upon hard times. In Wednesday's press release, he said the restructuring was the "final step" in his hard-fought campaign to put his personal finances in order.
Puzder, who described the Union Bank loan as Karcher's single largest obstacle, said the restructuring could be completed as early as Dec. 10.
While no specific role for Karcher has been set, returning the founder to the company makes sense because of the tremendous knowledge he has of the fast-food industry, said Willey, general counsel at Fidelity National Financial.
Doyle characterized the resolution of Karcher's financial woes as "a positive development" for Karcher. And he said that keeping the 3.9 million shares from being dumped on the market was also positive for shareholders.
Karcher Enterprises' stock jumped 50 cents a share to close at $9.625 in heavy Nasdaq trading Wednesday.
The Union Bank deal will dramatically cut Karcher's holdings in the fast-food company, but his family evidently will still control about 2 million Karcher Enterprises shares--or about 10% of the stock. Those shares are in addition to about 500,000 shares that Karcher would own through the limited partnership.
Said Foley: "We're striving to get an amicable and reasonable resolution to the continuing dispute between Carl Karcher and the board. We believe a resolution of the dispute is in the best interest of shareholders."