According to documents filed in mid-December in U.S. District Court in Los Angeles, the Torrance, Calif.-based coffee roaster and distributor hired CSFB in September. Farmer Brothers in October introduced a proposal that would reincorporate the company, which is registered in California, in Delaware. It also would adopt a number of antitakeover provisions that critics contend are aimed at increasing management's control of the company.

Disgruntled shareholders, led by investment firm Franklin Mutual Advisers LLC of Short Hills, N.J., oppose Farmer Brothers' adoption of the M&A defenses, instead favoring a sale or going-private transaction. But they questioned the company's retention of a financial adviser, characterizing the move as a ploy to distract attention from their concerns.

"There's no way they are interested in selling this company," said Gary Lutin, a spokesman for Franklin and other investors and president of New York investment firm Lutin & Co. "The fact that management didn't tell shareholders about hiring an investment bank when they did it raises real concerns about their motives for getting the investment bank."

Thomas Dubbs, a partner at New York law firm Goodkind Labaton Rudoff & Sucharow LLP who represents Franklin Mutual and other shareholders in a class action against the coffee company, accused Farmer Brothers of using the antitakeover provisions and other tactics, including "hoarding cash," to purposely lower the firm's share price to reduce its estate tax liability when control of the company shifts from chairman Roy F. Farmer, 87, to his son, CEO Roy E. Farmer.

"The retention of investment bankers demonstrates yet again that Farmer Brothers management is using every tool it can to keep itself entrenched," Dubbs said.

Spokesmen for Farmer Brothers and CSFB declined to comment.

Shares in Farmer Brothers, which carries a market capitalization of roughly $600 million and an enterprise value of $313 million, traded at $312.31 in afternoon trading Dec. 19. The company has about $294 million in cash, cash equivalents and short-term investments.

Jack Norberg, chairman of Standard Investment Chartered Inc., a Costa Mesa, Calif.-based investment firm that owns roughly 1% of Farmer Brothers, speculated that the company has instructed bankers not to seek out potential buyers.

Indeed, for years such shareholders have complained that Farmer Brothers' leaders run it like a private concern. The company has discouraged analyst coverage and done its best to mute the influence of investors, critics contend. They also note that the company does not have an investor relations department and declines to hold analyst conference calls.

At issue in the class action against Farmer Brothers, which is scheduled for a hearing Dec. 23 in Los Angeles, is whether Roy F. Farmer will retain control of a company employee stock option plan that amounts to a 9% stake in the firm. Plaintiffs argue that Farmer's roles as a trustee of those shares conflicts with his financial interest in the company.

Roy F. Farmer and management together control 53% of the company's stock. If the suit succeeds, they would no longer have a controlling stake in Farmer Brothers. That would boost shareholder efforts to vote down the reincorporation proposal at the company's annual meeting, which is set for Jan. 5.

Another suit filed by Catherine Crowe, sister of Farmer Jr., would remove him as head of a family trust that includes a 12.5% stake owned by the Crowes. The litigation, filed in California Superior Court, is set for a hearing Wednesday, Dec. 24.

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