WILMINGTON, Del. -- A class action lawsuit filed here seeks to halt a plan by the Queens, N.Y. supermarket chain Western Beef to purchase the remaining outstanding shares of its stock and become a private company.
The suit, which accuses the principals of Western Beef's holding company and others of conspiring to offer "an inadequate price" for the stock, was filed in Delaware Chancery Court on behalf of shareholder Robert Plumpe on Dec. 3. He claims in the suit that he is acting "as the representative of the class" -- defined as all other shareholders other than the defendants.
A company spokesman denied the allegations, calling the suit "premature" because a committee formed to recommend a final offer has not yet received a report from investment bankers hired to evaluate the deal. An attorney with the law firm defending Western Beef told SN the suit is "a typical shakedown" not uncommon to buyout proposals.
Neither Plumpe nor the lawyer who filed his suit could be reached for comment.
Peter Castellana, Jr., the president and chief executive officer, owns about 8.1% of the company's stock. Another 8.7% is owned by his brother, Joseph Castellana, executive vice president, and a separate entity owned by Peter and Joseph Castellana and their brothers and company Vice Presidents Michael and Frank Castellana, PSL Foods, holds 30%. All are named as defendants in the suit along with company directors Stephen Bokser and Arnold Becker. Bokser is president and CEO of New Jersey-based wholesaler White Rose Food, which supplies Western Beef.
The complaint charges that a proposed $11.2 million buyout offer -- $7.50 a share for the 28% not already owned by Cactus Acquisition, the holding company -- "is unfair and inadequate."