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Judge: Alico Lawsuit Can Continue
Lakeland Ledger – May 25, 2011
BARTOW | A circuit judge has ruled the lawsuit pitting two grandsons of the late Ben Hill Griffin Jr. will go forward.
Circuit Judge Karla F. Wright denied a motion late Tuesday by state Sen. J.D. Alexander (R-Lake Wales) and his father, John, that would have stopped the litigation against them in its tracks.
Baxter Troutman, a former state representative, filed the lawsuit on behalf of all Alico’s minority shareholders in October 2008 alleging the Alexanders abused their authority in managing Alico Inc., a land management and cattle company that Griffin bought in 1972 and expanded throughout Central Florida.
“I’m happy with the decision, but I get no pleasure in having to resort to such extreme measures,” Troutman said Wednesday. “But when you spend years trying to discuss concerns and issues for the minority shareholders and you get ignored and stonewalled, sadly I was left with but one remedy in trying to protect the hundreds of minority shareholders, which is what this case is all about.’‘
The Alexanders released a statement Wednesday through their lawyer, Bill Wilson of Holland & Knight: “We believe the special litigation committee properly found that Troutman’s lawsuit lacks merit and is not in the best interests of Alico or its shareholders.
“The court has decided the case must go forward, but has made no ruling on the merits. We are prepared to proceed and to ultimately prevail on the merits.”
The lawsuit accuses the Alexanders of railroading Alico’s board members into dealings that lined their own pockets, and Troutman is asking the court to order them to repay Alico. The lawsuit doesn’t specify an amount.
Troutman also alleges the Alexanders used undue influence to force Alico’s board to merge with their Lake Wales-based land company, Atlantic Blue, in 2004, when the Alexanders were directors in both companies.
The proposed merger eventually was withdrawn when five Alico board members resigned. Nine months after Troutman filed the lawsuit, the Alexanders sought to dismiss the case, saying an independent committee of Alico board members already determined the allegations had no merit.
But in her ruling, Wright said the two-member committee’s investigation was inadequate and the chairman, Charles L. Palmer, favored the Alexanders.
Palmer is a managing partner in North American Fund investment firm in Fort Lauderdale. He couldn’t be reached for comment Wednesday.
The other committee member, Evelyn D’An, a financial consultant in Miami Shores, failed to participate in much of the investigation, Wright said.
“It is evident Mr. Palmer drove this investigative train solo,” she wrote in her order. “Ms. D’An entered the depot, but never climbed aboard the investigative train.”
D’An couldn’t be reached for comment Wednesday.
Troutman’s lawsuit states the mass resignation by five board members caught the attention of the Security and Exchange Commission, leading to an investigation by Nasdaq, which lists the publicly traded Alico stock. The company appointed new board members within two months and avoided delisting by Nasdaq, but incurred $538,000 in costs to meet the deadline.
Wright said the special litigation committee failed to investigate all the issues affecting Alico.
She said key witnesses weren’t interviewed and relevant documents, including a letter from the resigning board members, weren’t considered.
The lawsuit isn’t the only issue facing Alico.
The Internal Revenue Service has asked Alico for $29.8 million in back taxes and penalties, not including interest, on its tax returns for 2005 through 2007.
[ Suzie Schottelkotte can be reached at suzie.schottelkotte@theledger.com or 863-533-9070. Ledger reporter Kevin Bouffard contributed to this report. ]
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