Three major shareholders of the former Seaway Food Town, Inc., have sued, contending that they were inadequately compensated when the Maumee grocery chain was bought by Michigan wholesaler Spartan Stores, Inc.
Specifically, they say they should have been paid $30 for each of their shares rather than the $5 in cash plus one share of Spartan given to each Seaway stockholder. Spartan first offered public traded stock in August at $11 a share. Its stock, traded on the Nasdaq National Market, closed yesterday at $6.50 a share.
The plaintiffs, who combined had more than 600,000 shares of Seaway stock, are Douglas P. Pope of Sylvania, who had nearly 202,600 shares; Sky Trust, N.A. of Pepper Pike, O., a trustee for 246,200 shares; Cede & Co. of New York City, which held 246,200 shares for the trusts of the late Paul L. Pope, a co-founder of Food Town who died last year; and Northern Trust Co., of Illinois, a custodian for Sky Trust shares.
They said in the lawsuit they did not support the Seaway sale, although a majority of Seaway shareholders did.
Sued in Lucas County Common Pleas Court are Seaway and Spartan, the former now a division of the Grand Rapids, Mich., grocery wholesaler. The case has been assigned to Judge James Bates.
Attorneys for the plaintiffs could not be reached for comment yesterday. Spartan spokesman Nick Thole said the company could not comment because it has not seen the complaint filed last week.
“The problem we have is that Spartan Stores is aware that a few shareholders have asserted their dissenters' rights, but we haven't received or had a chance to look at [the lawsuit], so we don't even know what their claims are,” he said.
The lawsuit asks the court to determine the fair cash value of the shares of stock and order Spartan to pay that amount and asks the court to order Spartan to pay attorneys' fees, other costs associated with the legal proceedings, and any other amount of money to court deems is proper.
Seaway Food Town, which owned 47 grocery stores and 26 Pharm discount drugstores, was the Toledo area's largest locally owned grocery chain, garnering about 25.5 per cent of the local grocery business, second only to Kroger Co.'s 33 per cent.
Spartan has about 20 million shares, of which Food Town shareholders will hold about 33.5 per cent.
On Seaway Food Town's final day of trading as an independent firm, its stock opened at $15.13 a share, dipped to $14.81, and finished at $15 a share - exactly half its 52-week high of $30 a share - but only about $2.50 from its 52-week low.