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[letterhead]
LUTIN & COMPANY
575 Madison Avenue
New York, New York 10022
Telephone (212) 605-0335
Facsimile (212) 605-0325
September 30, 2004
Grace K. Lee, Esquire
Division of Corporation Finance
Securities and Exchange Commission
450 Fifth Street, N.W.
Washington, D.C. 20549
Email:
leeg@sec.gov
Re: Farmer Bros. Co.
Dear Ms. Lee:
The September 29, 2004 letter from
Skadden Arps Slate Meagher & Flom on behalf of the management of Farmer
Bros. Co. ("Company") states that it responds to my September 24th letter,
but does not directly answer the essential question I had raised: whether
the Company’s management continues to exercise effective control of the
assets which they had reported as having been transferred to an ESOP trust
for the benefit of employees.
In an apparent effort to divert
attention from this question, the letter makes unsupported assertions about
“false and misleading” implications and presents new arguments which suggest
that the author is unfamiliar with both the Company’s ESOP and with the
general concept of an ESOP – or that he assumes the reader will be
unfamiliar. These assertions and arguments, even if there were some basis
for them, are irrelevant, since it has been established that the Proposal’s
provisions for employee elections of an ESOP governing “committee” are
actually an accepted practice.
The Company’s representative does,
however, provide an indirect indication of management’s position relating to
their control of the assets reportedly transferred to the ESOP. His letter
makes it clear that management’s purpose in blocking the Proposal is to
retain control of those assets.
This apparent management position
reinforces my September 24th letter’s suggestion of a need for SEC
investigation of the possible securities law violations. As you may know, a
December 23, 2003 federal court opinion in a Farmer Bros. shareholder action
stated that investors do not have standing to enforce the potentially
applicable laws themselves and must instead rely on the SEC to protect their
rights. I am therefore sending a copy of this letter to Mr. Petillon, the
Branch Chief of Enforcement for the SEC Pacific Regional Office, to inform
him of this new development relating to the Farmer Bros. issues with which
he is familiar.
Regarding the right of shareholders
to vote on the Proposal, it is hoped that you will require its inclusion in
the Company’s proxy statement. Whether a trust has been genuinely
established or will be established by corrective action, the promised
employee benefits of an ESOP are viewed as important to the Company’s value
by many of its shareholders who have expressed support of the Proposal.
There is no real reason why they should not be allowed to vote on
conventional provisions to secure those benefits.
Again, I encourage you to let me know
by email (gl@shareholderforum.com)
or telephone (212-605-0335) if you want any additional information, and I
thank you for your continuing attention to the interests of Farmer Bros.
shareholders.
Sincerely,
Gary Lutin
cc: Mr. Gregory E. Bylinsky (greg.bylinsky@limecapital.com)
Joseph J. Giunta, Esquire (jgiunta@skadden.com)
Andrew Petillon, Esquire (petillona@sec.gov)
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