This preview shows page 1. Sign up to view the full content.
Unformatted text preview: dozen lawsuits. He suddenly owed more than $70 million to various banks.
The falling price of CKE stock hampered his ability to repay the loans. In May of 1992, his brother Don — a trusted adviser and the president
of CKE — died. The new president tried to increase sales at Carl’s Jr. restaurants by purchasing food of a lower quality and cutting prices.
The strategy began to drive customers away.
As the chairman of CKE, Carl searched for ways to save his company and pay off his debts. He proposed selling Mexican food at Carl’s Jr.
restaurants as part of a joint venture with a chain called Green Burrito. But some executives at CKE opposed the plan, arguing that it would
benefit Carl much more than the company. Carl had a financial stake in the deal; upon its acceptance by the board of CKE, he would receive
a $6 million personal loan from Green Burrito. Carl was outraged that his motives were being questioned and that his business was being run
into the ground. CKE now felt like a much diffe...
View Full Document
- Spring '08