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Shareholder Sues to Halt Golden State Vintners Sale

March 12, 2004|From Bloomberg News

Golden State Vintners Inc., which supplies wine and grapes to California wineries, was sued by a stockholder who claimed he would be shortchanged in a planned $96-million inside buyout.

The company said Monday that it agreed to be bought for $6.85 a share in cash by a group led by Chief Executive Jeffrey O'Neill. The lawsuit said directors didn't conduct an auction or take other steps to determine the company's value.

The transaction "is an attempt by company insiders to cash out the minority shareholders in the private-label winemaker at an unfair price, under unfair terms and through improper means," said the suit filed Wednesday by Milton Pfeiffer in Delaware Chancery Court.

Pfeiffer's suit seeks to bring claims on behalf of all Golden State Vintners shareholders except for officers and their affiliates. It asks the court to halt the sale and award compensatory damages, lawyers' fees and legal costs.

Napa, Calif.-based Golden State, with $80.6 million in revenue last year and two straight years of losses, reported last month in a Securities and Exchange Commission disclosure that business and market conditions were improving.

Golden State shares rose 1 cent Thursday to $6.76 on Nasdaq. The stock has more than tripled in the last year.

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