Chairman’s Illness Adds Twist To Insider Battle at
Farmer Bros.
Roy F. Farmer, the 86-year-old chairman of
embattled coffee importer Farmer Bros., is incapacitated, suffering from
cancer and emphysema, according to his attorney, Marshall Oldman.
The revelation came after a June 11 Los Angeles Superior Court hearing at
which Farmer’s nephew, Steven Crowe, sought to remove his uncle as trustee
of four trusts holding a 9.8 percent stake in the company for the benefit
of Crowe and his sister.
Oldman’s statement was revealed a few days later via an online forum for
Farmer Bros. shareholders. He later confirmed it in an interview with the
Business Journal.
Dissident shareholders, including 9.8 percent holder Franklin Resources
Inc., have long demanded more disclosure of Farmer Brothers’ finances. The
elder Farmer, who recently ceded the chief executive title to his son, Roy
E. Farmer, has used his control of the company’s employee stock ownership
plan, as well as his and other family members’ holdings, to resist such
changes.
It is not clear how the revelations about Farmer’s illness will affect the
outcome of Crowe’s attempt to wrest control of his trust. Crowe’s
attorney, Adam Streisand, refused to speculate on how the news may affect
his case.
Crowe filed the petition to remove Farmer in April, accusing his uncle of
“cold-hearted” attempts to “misuse” the trusts “to freeze out” his sister
and mother, as well as himself. Last week, the judge ordered both sides to
mediate the dispute and scheduled another hearing for Sept. 30.
Oldman said his client “steadfastly opposes” Crowe’s petition, and said he
will file a response to it within the next month.
According to the petition, if Roy E. Farmer dies, control would likely
revert to City National Bank, which has volunteered to become the
successor trustee over Crowe’s inheritance.
Meanwhile, dissident shareholders are wondering why the company didn’t
reveal Farmer’s condition when he stepped down as chief executive in
March. While there have been reports that the elder Farmer hadn’t been at
the Torrance headquarters in months, the company did not disclose the
elder Farmer’s illness in any of its filings with the Securities and
Exchange Commission.
“It surely raises the questions of why didn’t they report this and when
they knew,” said Gary Lutin, who runs the shareholder’s forum. A Farmer
Bros. spokesman said the company has “nothing to say about the gossip.”
– RiShawn Biddle
