PHOENIX -- Five minority shareholders of Abco Foods here filed a lawsuit last week against Fleming Cos., its new owner, alleging that the wholesaler undermined the chain's attempts to become profitable.
Fleming, which purchased Abco two weeks ago in a public auction, denied the charges. Fleming Cos. is based in Oklahoma City.
The suit, filed Jan. 5 in Chancery Court of Delaware in New Castle County, named four other defendants in addition to Fleming Cos. Abco executives named in the suit are Thomas W. Field Jr., chairman and chief executive officer, and Edward G. Hill Jr., president.
The suit also identified as defendants William M. Lawson, senior vice president of corporate development and international operations at Fleming, and R. Randolph Devening, chief executive officer of Food Brands of America, Oklahoma City. Devening served as vice chairman of Fleming until August 1994. Both Lawson and Devening are currently Abco board members.
The plaintiffs named in the suit are Odyssey Partners L.P., Odyssey-Abco L.P., Prudential Securities Inc., Prudential Insurance Co. of America and W.R. Huff Asset Management Co. Together, the plaintiffs held a 28% stake in Abco, according to published reports.
The suit alleged that Fleming concealed its intention of acquiring Abco at a low price by becoming its senior creditor.
Fleming bid $66 million for the 71-store chain, representing the amount of Abco's debt to Fleming, its primary supplier. Fleming was the sole bidder.
"We have reviewed the pleadings and we believe they are totally without merit and Fleming intends to defend our position and protect our interests," she said.
She added that she could not comment specifically on the lawsuit's allegations because of the ongoing litigation.