| See also referenced February 14, 2006 letter. |
 Lutin seeks board probe of Farmer Bros. reports
Investment banker who runs shareholder forum wants to know if the company has been misleading employees about the group's intentions.
By Muhammed El-Hasan
An investment banker who runs a shareholder
forum on Farmer Bros. Co. called on the firm's board to investigate
whether managers have been misleading employees on investor initiatives.
Without Farmer Bros.' official blessing, the Internet-based forum is seeking a suitor to purchase the institutional coffee roaster and distributor, based in Harbor Gateway near Torrance. In the letter dated Tuesday, forum manager Gary Lutin said he was informed that company managers have been telling employees of "a plan by investors associated with me to sell off the company's properties and shut down the business, terminating the employees' jobs." Lutin wrote that this was used as an argument for employees to support the current members of the company board. In an interview, Lutin denied that the forum wants to shutter the company, calling such claims "completely inconsistent with both logic and the publicly open 'Forum' communications" about a possible sale. Lutin declined to identify the sources of reports on the erroneous management statement, citing privacy concerns. The opinion of employees is critical because they determine voting of 18.6 percent of company shares through an employee stock ownership plan. The founding Farmer family represents the largest investor block with about 40 percent of shares. If the dissident investors can't garner enough family-owned shares in support of their cause, the employees would then represent a critical swing vote and possibly the only chance for the dissident investors to ultimately get their way. "The employees are an important constituency of the company both in their capacity as members of an enterprise community and as shareholders," Lutin said in the interview. A spokesman for Farmer Bros. declined to comment on the letter. In October, Lutin's forum said it hired an investment banking firm to explore selling the company. For the second fiscal quarter, Farmer Bros. swung to a profit of $4.164 million, or 30 cents a common share, compared with a loss of $4.068 million, or 30 cents a common share, in the same period a year earlier. On Wednesday, the company's shares rose 13 cents to close at $21.24 on Nasdaq. The stock has been trading within a 52-week range from $19.11 to $25.86.
|
