Eight shareholders have sued to block Alfa Corp.’s $639 million proposal to buy out minority shareholders, claiming it’s an unfair price. The suit was filed in a Delaware state court. Alfa Corp. is incorporated in Delaware. The plaintiffs own almost 900,000 shares. Four were longtime employees of Alfa. Tuscaloosa shareholder Jack Kubiszyn, who was a University of Alabama basketball star in the 1960’s, claims company insiders are “trying to steal the company at an unfair price.” The shareholders who sued oppose the plan of majority shareholders – three affiliated companies with long-standing ties to the publicly traded Alfa Corp. parent company – to buy them out for $17.60 a share.
The suit alleges that most of the directors and officers of the three affiliates are directors and officers of Alfa Corp. That certainly appears to be a conflict of interest. For them to sit on both sides of the proposed deal isn’t too good for minority stock holders. Alfa, which, as most Alabamians know, grew out of the old Alabama Farm Bureau, said in a statement the proposed buyout of minority shareholders is transparent, fair and in the best interests of the company. Together, the three affiliates, Alfa Mutual, Alfa Mutual Fire and Alfa Mutual General, which are proposing the takeover, own 55% of Alfa Corp. stock. The suit seeks unspecified damages and class-action status on behalf of all similar shareholders. There are at least two other suits that cite similar claims about the Alfa deal and seek class-action status. The Alfa Mutual companies deny that there is any wrongdoing and say through a spokesman that the case will be defended. Our firm will be involved in the Delaware lawsuit which was filed by Birmingham lawyer John Somerville and Frank DiPrima, a lawyer from New Jersey.
Source: Associated Press
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