>> Embattled Mexican food chain Chipotle is gearing up for another fight, this time with billionaire hedge fund manager, Bill Ackman. Chipotle is already desperate to win back customers after a series of health scares sent burrito lovers running for the exits. Enter Ackman, who bought a massive stake in the company and wants Chipotle to do business his way.
But Reuters has learned, exclusively, that instead of trying to work with the billionaire, Chipotle has hired the best legal defense team in the business to fight them off. Reuter's correspondent, Svea Herbst-Bayliss.>> He was going to make the burrito great again. He was going to help these people see the light of day, get rid of their food safety issues.
Maybe they think they can solve their own problems. And that his solution to try and maybe get rid of the entire board is the wrong way to go about things to tackle food safety. That you are not going to get rid of E.coli by getting rid of the entire board.
>> Boards usually cooperate with activist investors in some way But Ackman's abrasive style and a series of high profile missteps on his part make him an unwanted partner.>> Bill Ackman has had a bit of a bad rap. He's had a string of not such good luck in that his fund is down.
One of his funds is down about 20%. We've seen evidence of when Bill Ackman has sort of ridden in on his white horse. And, for example, JCPenney, which was a true disaster. So, what they want to guard against is some guy coming in, bashing the door, and telling them exactly how to do things.
And one of the co-CEOs was the founder of the company, so rightfully he thinks that maybe he knows better. But so far management's efforts to turn things around have not worked. In the latest quarter, restaurant sales plunged 22% and the stock is still languishing at three-year lows. Despite that, the restaurant chain still doesn't want this guy anywhere near its guacamole.