Investor drops lawsuit against Noble Roman’s

BT Brands has dropped its lawsuit against Indianapolis-based Noble Roman’s, but the North Dakota-based restaurant company says it will continue in its other efforts to effect change in the restaurant chain’s board of directors.

Together, West Fargo-based BT Brands and CEO Gary Copperud own about 9% of the total shares of Noble Roman’s stock, making them among the company’s largest shareholders.

BT Brands has been sparring with Noble Roman’s over whether Noble Roman’s CEO Scott Mobley should remain on the company’s board. Mobley was the only board member up for re-election this year.

BT Brands had proposed replacing Mobley with Copperud, arguing that “a fresh perspective” was needed to turn things around at Noble Roman’s, which has seen its share price and shareholder equity decline and its long-term debt increase under Mobley’s leadership.

For its part, Noble Roman’s called the BT Brands proposal disruptive and said its five-member board of directors unanimously supported re-electing Mobley to the company’s board.

In late June, Noble Roman’s said it had determined that BT Brands was not qualified to nominate Copperud because the company had not been a shareholder of record at the time it made the nomination.

BT Brands characterized the Noble Roman’s position as a “technical interpretation of its bylaws,” because BT Brands’ and Copperud’s shares were held in brokerage accounts rather than in certificate form.

In early August, BT Brands filed a lawsuit against Noble Roman’s. In its complaint, filed in U.S. District Court in the Southern District of Indiana, BT Brands said its tally showed that Copperud had received 10,194,885 proxy votes as of Aug. 1, compared with 2,851,046 votes cast for Mobley. Noble Roman’s has 22,215,512 total shares outstanding and about 210 shareholders.

BT Brands asked the court to, among other things, permit it to vote in the board election and “permit Mr. Copperud to take the [board] seat to which he will have been duly elected.” The court denied the request.

Noble Roman’s convened its shareholders meeting Aug. 10 but adjourned for lack of quorum without taking any action. As a result, Mobley remains on the board and will be up for re-election at the company’s next board meeting in 2024.

BT Brands officially withdrew its lawsuit against Noble Roman’s on Thursday. In a statement issued that day, BT Brands noted that three of the five Noble Roman’s board seats will be up for election next year, “and we expect to nominate representatives for each available seat.”