Judge orders Papa John's to hand over documents, text messages related to founder John Schnatter's ouster

  • A Delaware judge rules Tuesday that Papa John's must hand over documents and text messages related to founder John Schnatter's ouster.
  • The order covers some messages between the directors and their lawyers.
  • Schnatter has argued in court that the company has documents that prove it was mismanaged and that Schnatter had been improperly pushed out of his executive roles.
Papa John's Pizza founder John Schnatter.
Angela Weiss | ACMA2012 | Getty Images Entertainment | Getty Images
Papa John's Pizza founder John Schnatter.

After months in court, a Delaware judge ruled Tuesday that Papa John's must turn over internal documents to its founder John Schnatter.

Schnatter, who owns a 30 percent stake in the company, stepped down as CEO in November 2017 and left his post as chairman in July after a series of public relations snafus crippled the company's stock.

Schnatter argued in court that the company has documents that prove the company was mismanaged and that he had been improperly pushed out of his executive roles.

On Tuesday, a judge ordered the company's directors to turn over documents and other communications, including text messages on personal devices, related to Schnatter's firing. The order covers some messages between the directors and their lawyers, the ruling said.

A spokesperson for Schnatter said, "We are pleased that Mr. Schnatter was vindicated today by the Delaware Court of Chancery, which ruled that Papa John's must give Mr. Schnatter numerous documents it has wrongly withheld from him for months."

A Papa John's spokesperson said it has already provided and will continue to provide John Schnatter with all materials that he is entitled to receive.

"We are pleased that the Delaware Court of Chancery agreed that John Schnatter's remaining document requests are 'overbroad' and significantly limited the scope of these requests," a spokesperson for Papa John's said. "...Our focus remains on the important steps we are taking to move Papa John's forward and create a better future for our 120,000 corporate and franchisee team members."

This ruling comes months after CNBC reported the pizza chain had begun to explore a possible sale.

Papa John's shares have fallen more than 30 percent over the past year, but the stock is up nearly 7 percent since the start of 2019.