Newspaper article THE JOURNAL RECORD

Teamsters Seek More Shareholder Muscle at Fleming

Newspaper article THE JOURNAL RECORD

Teamsters Seek More Shareholder Muscle at Fleming

Article excerpt

If Fleming Cos. Inc. is in danger of takeovers, shareholders need a say in management, says the International Brotherhood of Teamsters, who filed a suit in Oklahoma City federal court Thursday.

Seeking declaratory and injunctive relief under federal securities laws, the Teamsters allege that Fleming's board of directors should not have the exclusive right to instigate poison pill plans.

These tactics, says the Teamsters, should be at the discretion of the shareholders, not the board. The lawsuit, filed in the U.S. District Court for the Western District of Oklahoma, stems from a Teamster proposal submitted last year that asked Fleming's board to voluntarily revoke its poison pill provision. The Teamsters fund has 65 shares of Fleming common stock, a tiny fraction of the 37 million shares outstanding. Despite their small number of shares, the Teamsters' voluntary proposal won by a 2-1 margin, but the board elected to retain the plan anyway, saying that Fleming's stock was artificially low due to other litigation in which the company was involved. The Teamsters now want to compel Fleming to include a binding proposal on its proxy for the 1997 annual meeting. Fleming Spokesperson Nancy Del Regno says the poison pill plan as it is now is "an appropriate device to ensure that the board has time to analyze any potential situation." However, Bart Naylor, acting director of corporate affairs for the Teamsters, sees the plan as divisive. "We think it insulates management from owners when ... management should be most accountable." On Sept. 6 Fleming filed for a declaratory judgment on the same issue in Oklahoma County court, asking the court to determine the law -- whether poison pill plans fall under the exclusive control of the board of directors or whether they are subject to the discretion of the shareholders. Fleming contended in its Sept. 6 petition that under Oklahoma law, shareholder approval plans, i.e. poison pill plans, are "not the proper subject for action by the shareholders. …

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