OKLAHOMA CITY -- Fleming Cos. here said last week it reached an agreement in principle to settle two related civil lawsuits that attempted to link the company with an allegedly phony diverting scheme.
y involve Fleming's former subsidiary Malone & Hyde, which was named as a defendant in civil class action litigation relating to Premium Sales Corp., the Aventura, Fla.-based grocery and nonfood diverter accused of defrauding investors out of hundreds of millions of dollars. Some of the executives involved in the claim worked for Malone & Hyde and some for Fleming for a period of time, according to a Fleming spokeswoman.
The claimants in the civil lawsuits against Fleming include the trustee in the bankruptcy of Premium Sales and representatives of a class of some 1,600 individual investors affected by Premium's actions.
The Fleming spokeswoman did not provide details of how the claimants linked Fleming to the diverting company.
While Fleming has denied any allegations or responsibility for any loss, it has agreed to settle, and all related claims involving the company will be dismissed, the company said.
Late last month 36 people both in and out of the supermarket industry were indicted in a criminal case involving Premium by a federal grand jury in Miami. Among those indicted in that case were executives formerly working for Fleming or Malone & Hyde. The executives and their former titles are Guy Benamati, transportation division superintendent, and Henry Geringer, inbound traffic coordinator, both from the northern California division of Fleming. Also indicted were John M. Flynn, a diverter buyer for the Miami division of Fleming's Malone & Hyde division, Memphis, Tenn., and Kelly Thomas, who held various positions with Fleming's Malone & Hyde division.
"Although we do not believe our former subsidiary, Malone & Hyde, had any responsibility for the alleged losses realized by the Premium Sales investors, this settlement puts this matter behind us and is in the best interests of our shareholders," said Robert E. Stauth, chairman and chief executive officer of Fleming. "We can now move beyond this litigation and focus on more productive business initiatives."
The settlement is subject to documentation, court approval and approval by investors affected by the deal.