Farmer's shareholder meeting is put on hold TORRANCE: Coffee roaster delays annual session as some dissident investors ask the SEC to intervene in the company's voting-shares dispute. By Muhammed El-Hasan, Daily Breeze Torrance-based coffee roaster Farmer Bros. Co. on Thursday pushed back its annual shareholders meeting until an unspecified day in February. The company, which distributes its coffee beans to restaurants, hotels and other commercial enterprises, previously had set the meeting for Wednesday. The date change comes as several outside investors have formally asked the SEC to intervene in a dispute over voting shares. The coffee roaster has proposed a reincorporation in Delaware, whose laws empower public company directors more than in many other states. Some of the management's proposals would limit outside shareholders' powers. Prominent outside shareholders accuse management of using reincorporation to silence dissent, a charge the company denies. Some dissident investors are asking the SEC to prevent shares in Farmer Bros.' employee stock ownership plan from being voted at the upcoming shareholder meeting. The stocks, which represent 18.7 percent of outstanding shares, constitute a swing vote that could determine whether the company's proposals win approval. The dissident investors say those shares were allocated illegally. "In the case of Farmer Bros. unless you act to disallow the voting of improperly acquired shares, the non-management shareholders will continue to have their rights trampled on," according to a letter dated Tuesday and sent to the SEC by Leonard Rosenthal, a Farmer Bros. shareholder and finance professor at Bentley College in Waltham, Mass. Last month, Rosenthal lost a class-action lawsuit in U.S. District Court in Los Angeles to request a preliminary injunction to prevent the voting of the employee stock ownership plan shares. The judge ruled that an investor cannot sue the company under the Investment Company Act, which Rosenthal claims the firm violated. It's the SEC's responsibility to investigate possible violations of the act, the judge said in her ruling. It's unclear whether SEC intervention represents outside investors' last chance to prevent reincorporation. The shares in the employee stock ownership plan would be voted by the employees holding that stock. But dissident investors have voiced concern that those employees could side with their employer, Farmer Bros., possibly due to pressure from supervisors. The company denies the employees will be under pressure to vote in favor of management proposals. The company's preliminary proxy statement filed Thursday differs from a previous statement mainly in that shareholders would vote for five management-sponsored anti-takeover measures separately instead of as part of a proposal to reincorporate in another state. Farmer Bros. shares closed at $305 Thursday on the Nasdaq, up $3. Publish Date:January 16, 2004 © Copyright 2004 Copley Press, Inc.
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