Username  Password   Forget your password? | Contact Us
Current Cover

Lactalis gains control of Parmalat board

French dairy group Lactalis has gained control of Parmalat's board, "effectively putting it in position to approve its own 3.4 billion euro ($4.9 billion) takeover of the Italian company...," the Financial Times reported.

Lactalis is privately owned by the Besiner family. The French company "declared ownership of nearly 30 per cent of the Italian group's shares, giving it the right to name a new board," the FT article said. Lactalis has offered 2.60 euros per share to buy the remaining shares of Parmalat, the report noted.

The takeover period for Parmalat closes on July 8. Lacatalis aims to acquire a stake of at least 55%, the FT article said.

Parmalat's outgoing board never accepted Lactalis' offer and considers it to be hostile, the report noted.

Lactalis bought its initial 29 per cent of the company for 2.80 euros a share from a group of activist investors, who had earlier considered selling their stake to Italian bank IntesaSanpaolo, which failed in its efforts to mount an Italian counter-offer to Lactalis.

(Source: Financial Times, June 29, 2011.)

Family company owners try to revive their classic product

The family owners of Gold Pure Food Products Co., a 79-year-old company based in Hempstead, N.Y., are trying to revive one of their classic products -- borscht, a beet soup once popular with immigrants from Russia and Eastern Europe. A Wall Street Journal article said that despite declining sales of the product, the Gold family is continuing to make it. Other local companies that once made borscht have given Gold Pure Food their contracts to supply it, the Journal article said.

The Golds' company, which is also known for its horseradish, has expanded its product offerings to include mustard, salsa and wasabi, the report noted.

Brothers Marc and Steven [Gold], and their first cousins, Howard and Neil, have worked together for nearly 40 years. When they took over the company from their fathers in the 1970s, Gold Pure foods did about $2.5 million in sales. Now, thanks mostly to horseradish and other foods, the privately held company says annual sales are $18 million.

Gold Pure Foods has offered low-calorie and low-salt borscht as well as a thicker variety they call Russian borscht. They have labeled their products as gluten-free and tried different borscht recipes. The Journal sat in on a brainstorming session during which the Gold family debated changing the packaging or making a certified-organic borscht.

Shaun Gold, the 19-year-old son of CEO Marc Gold, told the Journal he had never even tasted borscht. (Source: Wall Street Journal, June 28, 2011.)

L.A. Dodgers file for bankruptcy

The Los Angeles Dodgers have filed for bankruptcy in a Delaware court, according to news reports. If the judge approves, the filing will give the team access to $60 million to cover expenses for about a month, the New York Times reported. According to the Times report, the team said it had secured a total of $150 million in financing to continue operations. A hearing was scheduled for June 28 in Delaware, where the Dodgers and four affiliated companies are incorporated, the Times article said.

The team said in court filings [June 27] that it planned to hold a competitive sale of its cable television rights within 180 days, a move that could permit [owner Frank] McCourt to hold onto the team because a deal would allow it to pay its debts and would be overseen by a bankruptcy judge instead of Major League Baseball....
But [Major League Baseball Commissioner Bud] Selig could seek a judge's permission to remove McCourt as owner of a team because of a league provision that allows baseball to terminate the franchise of owners who file for bankruptcy protection. baseball has taken the position in the past that it has the right to approve any television deal.

Since McCourt took over ownership of the team in 2004, the Dodgers have incurred $400 million in debt, the Times article said. Frank McCourt and his ex-wife, Jamie, have been waging a court battle over who owns the team.

The most recent 17-year television deal with Fox was to have been part of a divorce settlement between the McCourts, but Selig canceled the agreement after he said it would have served only to enrich Frank McCourt and would place the team's future in debt.

(Source: New York Times, June 27, 2011.)

Perdue changes its ad campaigns

Purdue Farms has refocused its marketing campaign to de-emphasize humor and respond to consumer concerns about the companies that produce their food, the New York Times reported.

The ads will still feature company chairman Jim Perdue, who has appeared in Perdue Farms ads for 20 years and is the son of pioneering pitchman Frank Perdue. But in the new campaign, Perdue is joined by company employees, including the chief veterinarian, along with a farm family that raises Perdue chickens, according to the Times report. The new ads are shot at actual Perdue Farms facilities and focus on how the chickens are raised rather than taking a humorous approach, the Times article said.

All that is embodied by a new ad theme, "We believe in a better chicken," which replaces "A healthy obsession with chicken." (The longtime slogan during the Frank Perdue era was "It takes a tough man to make a tender chicken.")

Perdue Farms' chief marketing officer, John Bartelme, told the Times that the company's new ads take "a documentary-style approach." Greg DiNoto, an official at the company's ad agency, told the Times that although past ads "used humor to great effect,"

"at the end of the day we felt the honest, straight-from-the-heart truth about Perdue was more appropriate for the times."
In many ways, the campaign echoes the no-nonsense "bullets of truth" that were delivered by frank Perdue, he added, as "we go full circle, back to ‘Our product is better and let's tell people in a real way what we do -- and do not do -- to make a great chicken.'"

(Source: New York Times, June 26, 2011.)

Appeals court rejects request to appoint guardian for Bettencourt

France's highest appeals court rejected a motion by Françoise Bettencourt-Meyers to have her mother, Liliane Bettencourt, placed under legal guardianship, the Financial Times reported. Bettencourt is the daughter of the founder of L'Oréal.

Bettencourt-Meyers had alleged that her mother's entourage was taking advantage of the heiress. "The daughter was particularly concerned about her mother's 145 million euro investment in a company owned by a client of her lawyer," the article said.

In December, Bettencourt-Meyers and her mother said they had settled their dispute, the FT report noted. In the latest legal move, the article said:

Despite the recommendation in favour by the doctors who had studied her medical records (the heiress had repeatedly refused physical examination), the court said the application for a guardian was invalid because the daughter had retracted her formal request at the time of last year's settlement with her mother.

The FT report said that under an agreement between the Bettencourt family and Nestlé, the Swiss group that has a 30% stake in L'Oréal, Nestlé can either sell or increase its stake in L'Oréal in 2014 or six months after Bettencourt's death, whichever comes first. According to the article, the French government is concerned that Nestlé will take control and move decision-making power out of France.

L'Oréal small shareholders are also worried. Indeed, they have already called on Mrs. Bettencourt to resign from the board with an independent director replacing her, given all the uncertainty of the latest developments.

L'Oréal CEO Jean-Paul Agon has downplayed speculation that Nestlé would increase its stake after 2014, but Nestlé chairman Peter Brabeck-Letmathe "has been more circumspect," the FT article said. The report noted, however, that Nestlé has avoided major acquisitions over the past decade, and that the Swiss conglomerate might decide to pursue General Mills rather than L'Oréal. (Source: Financial Times, June 24, 2011.)

H&M says it won’t raise prices

Swedish retailer Hennes & Mauritz, known for its "cheap chic" fashions, said it won't raise prices, as other chains have done in response to rising cotton prices and production costs in Asia, the Financial Times reported.

H&M is sticking to this strategy even though it reported its third consecutive decline in quarterly prices, the FT report noted.

[W]ith 70 per cent of shareholder voting rights controlled by the company's founding Persson family and the founder's grandson, Karl-Johan Persson, at the helm as chief executive, H&M has brushed off concerns over its performance and urged investors to take a long-term perspective.

(Source: Financial Times, June 23, 2011.)

W.L. Gore facing antitrust investigations

W.L. Gore & Associates, the family company that makes the waterproof Gore-Tex membrane used in outdoor sportswear, is facing antitrust investigations in the U.S. and Europe, the Wall Street Journal reported. W.L. Gore, a privately held company, is owned by members of the Gore family and associates.

The European Commission is planning preliminary investigations into complaints by competitors "by sending out questionnaires to Gore and other parties," the Journal report said. Last March, the U.S. Federal Trade Commission subpoenaed Gore as part of a formal antitrust investigation, the article reported.

Columbia Sportswear Co., a publicly traded company controlled by the Boyle family, has filed a formal antitrust complaint against Gore with European Commission antitrust authorities. Last year, Columbia acquired OutDry, a technology that competes with Gore-Tex, the Journal report noted.

OutDry's Italian inventors allege that Gore "demands exclusivity from outdoor clothing and sportswear brands," the article said. Columbia charges that those brands "fear losing their Gore-Tex license" because of consumers' perception that Gore-Tex is the only product of its kind -- an impression that Columbia contends is perpetuated by Gore's restrictions on its licensees, according to the Journal report.

Gore denies the allegations, the Journal article said. A company spokesman told the Journal that Gore has "confidence in the integrity of our business practices."

The Journal article said estimates of Gore's market share range from 70% to 90%. The article also noted that General Electric Co., which makes another competing technology, eVent, had been in talks with the FTC. In 2009, GE changed its marketing strategy for the product and stopped advertising the brand name as a competitor to Gore-Tex.

According to the Journal report, OutDry was invented in the late 1990s by two Italian brothers who decided to sell the company to Columbia after potential customers told them they couldn't use the product without endangering their licenses from Gore. (Source: Wall Street Journal, June 22, 2011.)

Spanish officials to investigate Botin family

Spain's National Court plans to investigate Emilio Botín, the chairman of Banco Santander SA, and other members of his family for potential tax evasion involving funds in Switzerland, according to news reports. The investigation is the result of the leak of client names from HSBC Holdings PLC's private bank in Switzerland.

Five of Botín's children -- including his eldest daughter, Ana Patricia Botín, who is CEO of the bank's U.K. unit -- are among the 11 family members under investigation. Also being investigated are Botín's brother, Jaime Botín, and five of Jaime's children, Bloomberg reported.

A Wall Street Journal article said Emilio Botín's father, who died in 1993, originated the Swiss account and passed the money to his children and grandchildren. The Botín family said it has already paid 200 million euros ($283.6 million) in back taxes and expects to be exonerated, the Journal report noted.

A criminal investigation had to be launched before the statute of limitations for the 2005 data expired at the end of June, the Journal article said. If the Botíns' amended tax returns are complete, the investigation will be dropped, according to the report.

The Botíns are among the most prominent individuals to be caught up in the case of the Swiss data. They have been at the helm of Santander for generations and have wide-ranging business interests.

(Sources: Bloomberg, June 16, 2011; Wall Street Journal, June 17, 2011.)

MLB commissioner’s decision nullifies McCourt divorce settlement

Major League Baseball Commissioner Bud Selig's decision to reject a proposed broadcast deal between the Los Angeles Dodgers and Fox Sports invalidates a divorce settlement between team owner Frank McCourt and his ex-wife, Jamie, the Los Angeles Times reported.

The McCourts' divorce settlement "had been predicated on both parties -- and their lawyers receiving an immediate piece of the television deal," the LA Times article said. In a statement, Selig called this a "further diversion of Dodgers assets for the personal needs of Mr. McCourt," the report noted.

The Fox contract called for $385 million in upfront payments. The league wanted all of that money funneled exclusively to the team, but [the] divorce settlement earmarked up to $173.5 million for the McCourts and their attorneys....
Court documents had previously revealed that the McCourts had used more than $100 million from team revenues for personal purposes. The couple owned numerous homes in such pricey locales as Holmby Hills and Malibu...
The debate over whether McCourt should remain as owner has been inextricably tangled up with his divorce. 

According to the LA Times report, Frank McCourt could restructure the Fox deal or challenge Selig's rejection in court. He could also take on a minority investor, but that "would depend on McCourt's winning full ownership of the team or getting Jamie's approval," the article said. (Source: Los Angeles Times, June 21, 2011.)

Modelo, Molson Coors unlikely to bid for Foster’s

Grupo Modelo SAB is unlikely to join with Molson Coors Brewing Co. to bid for Foster's Group Ltd., the Wall Street Journal reported. The Mexican and U.S.-Canadian companies had explored the idea of making a 50-50 offer for Foster's, which is Australia's largest brewer.

Modelo executives opted against putting the proposal up for a vote at a board meeting, the article said. The complexity of a joint proposal was an obstacle, according to the report. "Some members of the families that make up Modelo's controlling shareholder group were against pursuing a joint bid for Foster's," the Journal article said.

Modelo also would have had to obtain approval from Anheuser-Busch InBev NV, which owns a 50% non-controlling stake.

The Journal report said that Modelo could still try to bid for Foster's on its own. "But the Mexican brewer has never done such a large deal before," the article said. (Source: Wall Street Journal, June 15, 2011.)

Family-run Timberland agrees to be bought by VF Corp.

Timberland Co., a third-generation New England company, has agreed to be acquired by VF Corp. of North Carolina for $2 billion, the Boston Globe reported. VF's other brands include North Face, Vans and Wrangler.

VF plans to keep Timberland's Stratham, N.H. headquarters, but did not disclose whether there would be jobs cut because of the consolidation. It is also unclear how long members of the Swartz family, the visionaries who founded Timberland and are involved in Boston philanthropic circles, will stay on board. The company, born from the Abington Shoe Co., created the first guaranteed waterproof boot under the Timberland name in 1973 and manufactured its first boat shoe six years later.

The Swartz family collectively control about 73.5% of Timberland's voting power, the report noted.

"Rumors of a Timberland buyout have swirled for a decade, with potential suitors including companies such as Nike, Adidas and Stride Rite," the Globe article said. An analyst told the Globe that he expects a competing bid from another company.

Third-generation CEO Jeffrey Swartz and his father, Sidney W. Swartz, have agreed not to participate in any competing business for three years after the completion of the VF transaction, the Globe reported. (Source: Boston Globe, June 14, 2011.)

Founder’s granddaughter set to list Prada on H.K. stock exchange

Miuccia Prada, president and head designer of Prada, the Italian fashion house founded by her grandfather, is preparing to list the company on the Hong Kong stock exchange on June 24. The planned IPO, which could raise as much as $3 billion, "is making waves," the Wall Street Journal reported.

Ms. Prada, 63 years old, said in an interview that she strongly promoted the choice of Hong Kong over Milan for the IPO, overcoming opposition within the Italian business community, including from some banks.

When Miuccia Prada joined the company in the 1970s, it was a "sleepy Milanese luggage maker," the Journal article said. "Over the next two decades she turned the company into a global fashion leader...."

Ms. Prada believes an IPO in Hong Kong will help the family-owned company draw upon the dynamism of Asia and expose some members of her management team to a different culture.

(Source: Wall Street Journal, June 13, 2011.)

Qualcomm founder’s son praised as CEO

Paul E. Jacobs, who succeeded his father, founder Irwin Jacobs, as CEO of chip maker Qualcomm in 2005, "has spent the last six years expanding Qualcomm's business beyond his father's tight focus on the digital wireless technology known as C.D.M.A. (code division multiple access)," the New York Times reported.

Such a family succession in publicly traded companies is rare; Ford Motor and Comcast come to mind. For it to succeed is rarer still.
Corporate governance specialists often disapprove of such successions. But the younger Mr. Jacobs has positioned Qualcomm, which builds chips for mobile devices, to lead the smartphone chip market as consumers increasingly do their computing in their palms and not tethered to their desks.

Cody Acree, an analyst at the Williams Financial Group, told the Times:

"Qualcomm has been able to do the handoff from father to son that most other companies have not been able to do. Paul is an engineer who owns patents in his own right and was a brilliant technologist before moving into this position. And I think the industry as a whole respected him, knowing he was not just being given the job because it was his dad's."

The Times article said that starting in the seventh grade, Paul Jacobs worked part-time at Linkabit, another technology company his father founded. During college he worked at Qualcomm in the summers. Jacobs told the Times:

"Another thing that my father did for me was that every summer I worked in another area of engineering, so that by the time I went to college, I had done almost every kind of engineering there was."

(Source: New York Times, June 12, 2011.)

Lucrative arrangement for Charles Dolan at Cablevision spinoff

An 8-K filing from Cablevision discloses that Charles Dolan, the company's chairman, will receive lucrative compensation for part-time duties as executive chairman of AMC Networks, a planned spinoff of Cablevision, the business blog reported.

Dolan and his family control nearly 71% of the vote at Cablevision, the blog report noted. Last year, Cablevision paid him $13.8 million, including $10 million in cash, $3 million in stock and other benefits.

Under Dolan's contract with AMC, he will receive an additional $2 million: $400,000 in salary, a target bonus of $700,000, plus long-term incentive grants of $900,000 in a combination of cash and stock, the Footnoted report said. The blog noted that, according to the 8-K, Dolan will "devote a portion of his business time" to his position as AMC's executive chairman but "will devote most of his business time" to his job as Cablevision's chairman. (Source:, June 10, 2011.)

Hussey Seating acquires Ill. company

Hussey Seating Company, a 175-year-old family-owned company based in North Berwick, Maine, has acquired Clarin Seating of Illinois.

Hussey produces spectator seating for schools, stadiums, houses of worship and entertainment venues. Clarin's best-known product is portable seating (known in the industry as "Clarin chairs") for gyms, arenas, stadiums, theaters and casinos. Clarin also manufactures fixed tabletop learning systems for educational settings.

In announcing the deal, Hussey said it will continue manufacturing Clarin products in the Chicago area at least through the end of the summer but will eventually move the operation to Hussey's manufacturing facility in Maine. Hussey said its Maine facility, which produces more than 500,000 seats a year, has the capacity to produce "many more."

Daughter files new motion in L’Oreal dispute

Françoise Bettencourt Meyers, the daughter of L'Oréal heiress Liliane Bettencourt, filed a legal motion challenging "the influence of her mother's entourage," the Wall Street Journal reported. The mother and daughter had agreed to stop their legal battle six months ago, the Journal report noted.

The "entourage" was chosen as part of a December agreement between the 88-year-old Bettencourt and her daughter, the article said. It includes Bettencourt's lawyer and trustee, Pascal Wilheim, and a doctor and nurse.

The French newspaper Le Monde reported [June 8] that Ms. Meyers believes the entourage is preventing her from seeing her mother.
The motion could revive years of legal sparring over the aging billionaire's fortune and, ultimately, control of the French cosmetics company.....

The December agreement "reinforced family management of the 31% stake in L'Oréal and provided for assistance to Ms. Bettencourt," the Journal article said. Under that agreement, Meyers dropped motions requesting that the court mandate a guardian for her mother.

The Journal said that, according to "a person close to" Bettencourt, the heiress was "furious" about her daughter's latest legal move.

In a 2007 lawsuit, Meyers accused a celebrity photographer of bilking her mother. As part of the December agreement, the photographer returned all but 200 million euros (about $300 million) in gifts, the Journal reported. (Source: Wall Street Journal, June 9, 2011.)

Shari Redstone sells Russian theater chain

Shari Redstone and her partners have sold Rising Star Media, a 75-screen Russian theater chain, to Cinema Park, Russia's largest chain of cinemas, the Los Angeles Times' "Company Town" blog reported.

Shari Redstone is the daughter of Sumner Redstone, chairman of Viacom Inc. and CBS Corp. Her partners in Rising Star Media were Paul Heth and investment banker Charlie Ryan of UFG Private Equity of Russia, the report noted. The blog cited sources who said the business was sold for $200 million.

Redstone launched Rising Star Media in 2002 in partnership with Boston-area-based theater company National Amusements, of which she is president, and in 2009 acquired 100% ownership of the company with Heth and Ryan.

(Source: "Company Town," Los Angeles Times, June 6, 2011.)

Tata Global Beverages has big ambitions

Tata Global Beverages, which owns the U.K.'s Tetley Tea and the U.S.'s Eight O'Clock coffee, has had "lackluster" performance in the past few years, but the company plans to expand globally, the Financial Times reported.

Supporting these ambitions is a $1 billion war chest for acquisitions and alliances with PepsiCo and Starbucks, the beverages' groups, which boast vast distribution networks.

The company, which is part of the Tata empire, is seeking "a much larger share" of the U.S. market, Tata Global Beverages' vice chairman, Krishna Kumar, told the FT. It's planning to diversify from coffee and tea into high-margin health and nutritional drinks, the article said.

As a family controlled company, Tata Global Beverages has the luxury of taking a longer view. Mr. Kumar notes that it is all part of a long journey from the tea plantations where the company started to shop shelves across the world. 

(Source: Financial Times, June 7, 2011.)

Chicago hot dog company sues founder’s grandson

Vienna Beef, a Chicago maker of Vienna hot dogs, is suing Scott D. Ladany, grandson of one of the company's founders, who is no longer affiliated with Vienna and owns a rival company, Red Hot Chicago. The Chicago Tribune reported that the suit, filed in U.S. District Court in Chicago, claims Ladany's company "either ripped off Vienna's 118-year-old recipe or is lying by telling customers that its hot dogs are the real thing."

Jim Bodman, Vienna Beef's CEO, bought the company with a partner in the 1980s, the report noted. Vienna Beef is suing for trademark infringement, false advertising and unfair competition, as well as other claims.

Ladany, grandson of Vienna founder Samuel Ladany, was once employed by Vienna as a sales manager but has had no affiliation with the company since 1983, when he sold his 10 percent stake, according to the suit. At that time, Ladany signed employment and severance agreements, which included a gag order about Vienna's secret recipes, the suit said.

Ladany started the Red Hot Chicago hot dog company in 1986, the Tribune article said.

Red Hot Chicago's website doesn't mention Vienna but repeatedly and prominently uses the tagline, "A family tradition since 1893."

(Source: Chicago Tribune, June 6, 2011.)

N.J. family flooring firm focuses on the environment

Keith Campbell, the fourth-generation chairman of Mannington Mills Inc. in Salem County, N.J., has been working to reduce his flooring company's environmental impact, the Philadelphia Inquirer reported. The article said the company is

restoring 12 acres of native habitat on its 500-acre Mannington Township property and by striving to use more recycled materials in vinyl floor tiles and other products than it generates in waste that gets shipped to landfills.

In 1924, Campbell's grandfather moved the company from Salem city to an area of wetlands and farmlands bordering the Salem River. Campbell told the Inquirer:

"We've been doing some remediation work here. What my grandfather did in 1924 is different than the world is today."

The New Jersey Department of Environmental Protection has named Mannington Mills one of its Environmental Stewardship leaders, a designation given to companies "that go beyond what is required by the laws to protect the environment," the article said.

Because of the economic downturn, the company has reduced its employment ranks by a third, the Inquirer noted. Campbell "is a fervent advocate for U.S. manufacturing," the article said. (Source: Philadelphia Inquirer, June 6, 2011.)

Spain’s Puig group ‘on a spending spree’

Puig Group, the luxury house based in Spain and founded in 1914, "has been on a spending spree," a Financial Times report noted. In May, it acquired Hermès's 45% stake in the house of Jean-Paul Gaultier, plus another 10% stake from Gaultier himself. In February, it took over the Valentino fragrance license from Procter & Gamble, and next season it will reintroduce Paco Rabanne women's wear.

Marc Puig, Puig's third-generation chairman, told the FT that despite the economic downturn, 2008 to 2010 were the company's "best years on record."

Puig is an anomaly in the luxury market in a number of ways. It is the only Spanish luxury group. It is private and remains family-run. And it is, as Mr. Puig says, a "hybrid" of fashion and fragrance....

Puig told the FT that because Puig Group is a private company, it could take more than a decade to "learn" the fashion business, even making high-profile missteps along the way. (Source: Financial Times, June 6, 2011.)

Fiat bids for Canada’s stake in Chrysler

Fiat SpA has offered the Canadian government about $125 million for Canada's 1.7% stake in Chrysler Group LLC, the Wall Street Journal reported. Two days earlier, Fiat had finalized a deal to buy the U.S. government's remaining 6% stake in Chrysler for $500 million, the report noted.

Fiat is also negotiating to buy out the Chrysler stake held by the United Auto Workers health care trust fund, the Journal article said. (Source: Wall Street Journal, June 6, 2011.)

Fiat will buy U.S.’s remaining stake in Chrysler

Fiat SpA will acquire the U.S. government's remaining stake in Chrysler Group LLC for $500 million, Bloomberg reported. Fiat will pay an additional $60 million to the U.S. Treasury as part of a deal to acquire the government's rights to buy a union trust fund's stake in Chrysler. Fifteen million dollars from the latter transaction will go to the Canadian government, the report said.

With the new option to buy all of the Chrysler shares held by the United Auto Workers' retiree health-care trust, [Fiat] Chief Executive Officer Sergio Marchionne may not need to hold an initial public offering.

Before the announcement, Fiat had increased its holding in Chrysler to 46% after Chrysler repaid $7.6 billion in U.S. and Canadian government loans, the Bloomberg report said.

Citing an industry observer, the article said, "The quick purchase of a majority stake in Chrysler shows how fast Marchionne has taken the ... carmaker from deep losses to a position where it could break even and succeed...."

Fiat said in a filing that it has rights to raise its stake beyond 70%, the report noted. A Chrysler IPO is still possible, or Fiat may allow the union trust to sell its stake to an outsider, the report noted. (Source: Bloomberg, June 3, 2011.)

Jurors reject Ringling Bros. circus heirs’ claims

A legal battle between Kenneth Feld, CEO of Feld Entertainment, whose properties include Ringling Bros. and Barnum & Bailey Circus, and his sister, Karen Feld, has ended with jurors determining that neither side had proved its case, the Associated Press reported.

The Felds' father, Irvin Feld, was a rock 'n' roll promoter who bought the Ringling Bros. circus in 1967. The company also presents Disney on Ice, drag racing and monster truck shows.

Karen Feld, 63, sued Kenneth, 62, for $110 million for assault. After a two-week trial in U.S. District Court in Washington, D.C., jurors rejected her claim that he ordered his security guards to assault her at a memorial service for their aunt. They also rejected his counterclaim that she trespassed at the 2007 shiva by shouting anti-Semitic obscenities, according to the AP report.

Karen Feld said she has a history of brain injuries that cause seizures. She testified she couldn't control what she was saying when she went into one of her episodes at the penthouse apartment where her aunt's memorial service was held and where she lived with her brother as a youth. She said her brother's guards harmed her by dragging her out of the service and she eventually needed to have a tumor removed because of their assault and battery.

The AP report noted that the Feld siblings have a long history of animosity:

The case is the culmination of decades of estrangement between the Feld siblings, the only children of former circus owner Irvin Feld. Irvin Feld died in 1984 and passed ownership of Feld Entertainment and most of his wealth to his son, leading Karen Feld to file her first lawsuit against her brother. She won a settlement from that case and reached an agreement with her brother earlier this year in another suit over their uncle's estate.

An earlier AP article said:

Kenneth Feld has gone to great lengths to protect the family's privacy. He even hired a prominent former CIA covert operative to run a secret 8-year operation to spy on and divert an author who wanted to write a Feld family history. The author's revelations included Irvin Feld's homosexuality, his wife's suicide and his children's long-running feud.

The author, Jan Pottker, sued Kenneth Feld after the details of the spying plot were revealed in a lawsuit against Feld Entertainment by Kenneth Feld's former right-hand man, Charles Smith, whom Feld had fired. Both the Pottker and the Smith cases were eventually settled, the AP article said.

According to the AP's post-trial report, Karen Feld said on the witness stand that both her parents physically abused her and that she once walked in on her father having sex with her fiancé. "Kenneth Feld gave a much kinder portrayal of their family....," the article said.

The jury found that Karen Feld was falsely imprisoned by the private security guards her brother hired, but they also ruled the action was justified.

(Sources: Associated Press, May 24, 2011 and May 5, 2011.)

Report: David Perpich a potential N.Y. Times successor

An article in Adweek called David Perpich "the only Sulzberger family member worth watching." Perpich is the grandson of former New York Times publisher and chairman Arthur Ochs "Punch" Sulzberger.

The report noted that Perpich, 34, joined the New York Times Co, last year as executive director of paid products at, including the company's paywall and other digital innovation efforts.

According to the article, Perpich graduated from Duke University in 1999 and was director of operations at Scratch DJ Academy in New York, "a training ground for aspiring disc jockeys." He then attended Harvard Business school and, after graduating, interned at, a Times Co. holding.

Then, in 2007, when the time came to decide whether to join the Times or branch out, Perpich chose to prove his worth elsewhere. He settled on Booz Allen Hamilton, where he was a senior consultant in its consumer media and digital practice.

The article noted that besides Perpich, five of the 27 fifth-generation Ochs-Sulzbergers currently work at the Times, including Kansas City bureau chief Arthur Gregg Sulzberger, son of current company chairman Arthur Sulzberger.

Meanwhile, the Times Co. announced that Jill Abramson, the former managing editor, will replace Bill Keller as executive editor of the Times in September. She is the first woman to hold the position. (Source: Adweek, May 31, 2011.)

Sealed Air Corp. will acquire Diversey Holdings

Sealed Air Corp., a global specialty packaging company, will acquire Diversey Holdings Inc. this year in a deal worth $4.3 billion, the Business Journal of Milwaukee reported. Diversey provides cleaning, sanitization and hygiene products to industrial and retail customers in the food and beverage, food service, health care and lodging sectors, and to building service contractors. Its net sales in 2010 were $3.1 billion, according to the report.

Diversey is a privately owned company controlled by members of the Johnson family (owners of SC Johnson) and private equity firm Clayton, Dubilier & Rice LLC, which acquired a 46% stake in November 2008.

Diversey shareholders will receive $2.1 billion in cash and an aggregate of 31.7 million shares of Sealed Air worth more than $800 million for total equity consideration of $2.9 billion. Including debt assumption, the deal is worth $4.3 billion. At the end of the deal, Diversey's shareholders will own about 15 percent of Sealed Air's stock.

The article noted that Helen Johnson-Leipold

took over as chairman of Diversey in February after her brother, Samuel Curtis Johnson III, took a leave of absence. He has since retired from the company and in March was charged with one count of repeated sexual assault of a child. He entered a not guilty plea to the charges.

(Source: Business Journal of Milwaukee, June 1, 2011.)

Jamie McCourt seeks immediate sale of Dodgers

Former Los Angeles Dodgers CEO Jamie McCourt has asked a judge to order an immediate sale of the team to avert a potential takeover by Major League Baseball, radio station KGMI-AM reported.

According to the Dodgers website, McCourt submitted a filing on [May 19] to Los Angeles Superior Court Judge Scott Gordon, saying that her ex-husband and club owner Frank McCourt had badly mismanaged the franchise since she was fired by him.
Jamie McCourt, whose bitter divorce from Frank last year was presided over by Gordon, wants the Dodgers to be sold by both parties to gain the maximum value from the primary asset of their dissolved marriage.

Gordon ruled in December that the Dodgers were jointly owned by the McCourts.

Gordon tossed out a 2004 post-nuptial agreement that Frank McCourt contended gave him full control of the team, although Frank McCourt's attorneys vowed to fight on in court.

(Source: KGMI-AM, May 20, 2011.)

Shipyard entrepreneur’s son faces challenges at Phila. facility

Kristian Rokke, the 28-year-old scion of one of Norway's wealthiest families, faces challenges at Aker Philadelphia Shipyard, where he is the new CEO, the Philadelphia Inquirer reported. His father, Kjell Inge Rokke, is chairman and the primary shareholder of the shipyard's parent company.

[Kristian Rokke's] March appointment by parent company Aker in Norway was a surprise, coming just weeks after a financing deal, including $42 million from Pennsylvania, had enabled the shipyard to stay open to build two more ships -- without buyers lined up --until future work could be secured.
It also signaled to people watching, and possibly to potential customers, that Aker is committed to Philadelphia and does not want the yard to shut down. 

Rokke started in the shipbuilding industry in Norway at age 17, the Inquirer report said. Kristian Rokke's parents were divorced, and his father remarried. The eldest of Kjell Rokke's four children, he was born in Seattle and lived there with his mother until he moved to Norway at age 12, the article said. He attended Colby College in Maine, the London School of Economics and the BI Norwegian School of Management. He worked at an Aker trainee program in Malaysia and came to the Philadelphia yard in 2007.

In addition to the need to get more shipbuilding work, Rokke must contend with tensions with the unions at the Philadelphia facility, the article said. (Source: Philadelphia Inquirer, May 22, 2011.)

Panel: Toyota culture contributed to recall crisis

A seven-member panel investigating Toyota's recalls of more than 14 million vehicles found that the company's culture contributed to the problems, the New York Times reported. The panel was created last year by Toyota and is headed by Rodney E. Slater, a former U.S. transportation secretary, the article said. Toyota is paying the panel, which will spend a second year monitoring how well the company carries out its recommendations and their effectiveness, the Times reported.

[The] report said Toyota had been slow to discover the [acceleration] pedal and floor mat issues because it viewed complaints made to the company or to federal regulators about sudden acceleration skeptically and defensively. It said Toyota had failed to apply the principles of its manufacturing process, known as "the Toyota Way" and built around the concept of detecting and responding to problems quickly, to evaluate criticism from external sources.

Jeremy Anwyl, CEO of vehicle information website, told the Times:

"The very culture that works so well for them when things are stable and predictable really doesn't work when you're dealing with a fast-paced crisis."

The Times article noted that Toyota was the only major automaker to report a sales decline last year, while the rest of the industry experienced a 13% gain. The article said:

The report said Toyota had treated safety differently from other manufacturers, by lumping it into the larger issue of "quality" and making it part of eveyone's responsibility rather than assigning it to specific executives and employees.

According to the Times article, the panel report recommended that Toyota name a single executive to oversee its North American operations, "which now operate as separate sales, engineering and manufacturing organizations, each reporting to executives in Japan."

Among the top recommendations by the panel is for Toyota to decentralize its corporate structure and break down the "silos" within its organization that "hindered information-sharing and contributed to miscommunication." The report concluded, "Toyota has erred too much on the side of global centralization and needs to shift the balance somewhat toward greater local authority and control."

(Source: New York Times, May 23, 2011.)

Diageo reportedly seeking to acquire Jose Cuervo

Diageo is reportedly in talks to buy Jose Cuervo, the world's biggest tequila brand, for more than $2 billion from its family owners, Bloomberg News reported. Diageo is the world's largest liquor maker Its brands include Johnnie Walker scotch and Smirnoff vodka, the report noted.

Citing "three people with knowledge of the matter," the article said: 

Cuervo is in exclusive discussions with Diageo, which has the first option to buy the company because of its international distribution rights to the brand, said one of the people, who declined to be identified because the talks were confidential. The negotiations might not lead to a deal because the Beckmann family, which owns Cuervo, hasn't committed to selling, the people said. One person said the Beckmanns were leaning toward a sale. 

The Bloomberg report noted that other liquor companies, including Pernod-Ricard, are also interested in Cuervo.

The article noted that Casa Cuervo chairman Juan Beckmann Vidal had said the company was renegotiating its distribution deal with Diageo and wasn't considering selling the brand.

The first Vino Mezcal de Tequila de Cose Cuervo was made in 1795, the article said. (Source: Bloomberg News, May 24, 2011.)

Inditex’s adaptability is key to its success

Inditex, the Spanish company that operates Zara stores, has become the world's biggest clothes retailer by sales because of its "ability to respond quickly to changing trends," the Financial Times reported.

Founder Amancio Ortega, 75, who is Spain's richest man, stepped down from the chairman's post this year. His successor is Pablo Isla, who had been the company's CEO for the past six years, the article said.

The company still produces 49% of its clothes in Spain, Portugal and Morocco, according to the report.

[W]hen Inditex floated in 2001, with Mr. Ortega retaining 59 per cent of its shares, financial analysts initially doubted the sense of manufacturing at home when rivals were rushing to take advantage of cheaper costs in Asia. Mr. Isla argues that Inditex's business model is proving itself as retailers grapple with weak consumer confidence against the backdrop of their own costs rising.

The company was founded in 1975 as a bathrobe factory in A Coruña, Spain, the article said.

Inditex employees, too, say the company's key strength is its roots as a manufacturer, meaning a cultural emphasis on logistical efficiency epitomized by its base on an industrial estate outside of A Coruña....

(Source: Financial Times, May 23, 2011.)

Chairman’s son takes new role at ArcelorMittal

Aditya Mittal has taken charge of ArcelorMittal's European division, the company's "biggest and most problematic unit," the Financial Times reported. Analysts see the move as a sign that Mittal, the son of 60-year-old chairman and CEO Lakshmi Mittal, is being groomed for the top job, the article said.

Aditya Mittal has until now taken charge of ArcelorMittal's operations in the Americas. This is a job seen as less tough than running the European unit, which has the lowest rate of earnings per tonne of all the company's four steel divisions.
He will continue as chief financial officer with a special role in looking at potential acquisitions.

The FT report noted that observers have praised Aditya Mittal's running of the company's U.S. unit. "Any move to push him into the top job would be relatively uncontroversial," the article said. (Source: Financial Times, May 25, 2011.)

Hermes family shareholders vow to keep control

Family shareholders of Hermès International said they are determined to maintain control of the company, the Wall Street Journal reported. But according to the report,

larger rival and shareholder LVMH Moët Hennessy Louis Vuitton SA sought to portray itself as a legitimate -- though not passive -- shareholder at Hermès's annual meeting.

The Journal report noted that in an interview with French daily Le Figaro, Bertrand Puech, who heads the limited partnership that controls Hermès, "called for LVMH to sell half of its more than 20% stake in Hermès and said that Hermès was the victim of attacks."

But Mr. Puech used the shareholder meeting to offer somewhat of an olive branch, saying: "A new era is now opening." Other Hermès family members said that the company should look to the future. 

(Source: Wall Street Journal, May 31, 2011.)

Conde Nast CEO: Family is involved in key decisions

Condé Nast, the publisher of Vogue, Vanity Fair, the New Yorker and other magazines, will invest $500 million in digital properties, the Wall Street Journal reported. Condé Nast's revenue declined by 30% from 2007 through 2009, according to the report. Its parent company, Advance Publications Inc., is owned by the Newhouse family.

In a interview with the Journal, Condé Nast CEO Chuck Townsend said he sees licensing as an untapped source of revenue. "The licensing business is a complete change of attitude for the Newhouse family," Townsend told the Journal.

Townsend also said that 83-year-old chairman Si Newhouse Jr. is involved in the company "at his own pace."

"He's chairman of the family board of directors that presides over Condé Nast. [Townsend's top lieutenant, Bob Sauerberg] and I run the business. When it gets to balance sheet decisions, the family's involved."

Townsend also said that "the management structure is in place" to continue. after Si Newhouse's departure.

"You don't replace Si Newhouse. But we will survive that transition very comfortably because the whole company is structured to do just that."

(Source: Wall Street Journal, May 31, 2011.)

Hedge fund manager David Einhorn takes stake in N.Y. Mets

Hedge fund manager David Einhorn, president of Greenlight Capital Inc., has agreed to buy a minority stake in the New York Mets baseball team for $200 million, according to news reports.

The Wall Street Journal reported that Einhorn's stake is less than 49%. The Mets, whose majority owners are brothers-in-law Fred Wilpon and Saul Katz, are expected to lose up to $70 million this year, the Journal reported. Last year, they borrowed $25 million from Major League Baseball, the article said.

A minority stake doesn't necessarily give Mr. Einhorn, 42 years old, any ability to change the team's fortunes. He isn't expected to be involved in day-to-day management, according to people familiar with the matter. And Mr. Einhorn didn't seek any stake in the profitable sports cable channel Sportsnet New York, of which Messrs. Wilpon and Katz own 65%.
But [Einhorn] may believe he has the team's owners in a squeeze play. Given their need for cash, he can drive a hard bargain now and perhaps angle to secure the chance to gain control in the future, sports bankers said.

Wilpon and Katz are being sued by Irving Picard, the trustee recovering assets for victims of Bernard Madoff's Ponzi scheme, the Journal report noted.

By gaining an investor in the Mets, the owners can now focus on gathering money for a possible settlement with Mr. Picard. They are expected to use the cash injection to cover expenses, pay down debt and repay Major League Baseball.

The New York Daily News reported that $100 million of Einhorn's investment will go toward the club's debt, which is believed to total about $600 million. Citing a source close to the negotiations between Einhorn and the Mets, the Daily News reported:

Einhorn is structuring the deal so that he is in effect assuming the $100 million in debt as a protection in the event of a judgment against the Mets' owners in the hotlycontested Madoff litigation. His investment, therefore, would not be subject to a claim of assets by ... Picard, although if the Wilpons do end up with a favorable ruling in the Picard case, Einhorn's $100 million in debt will then become equity.

The Daily News report also said:

If Einhorn does exercise his option to increase his investment to a majority share -- believed to come into effect in about five years unless a Madoff judgment would come sooner -- Wilpon and Katz can block him and retain control of the team they have owned for three-plus decades by buying out Einhorn, at which point his one-third percentage in the team would be decreased by nearly half, or about 16% - 17%. The source described the buyout as being at "an unfavorable price to the Wilpons and Katz (conceivably close to the $200 million investment)." 

(Source: Wall Street Journal, May 27, 2011; New York Daily News, May 28, 2011.)

Graeter’s makes deal with Fresh Markets

Graeter's, a family ice cream company founded in 1870, will sell its products in 100 Fresh Market stores, according to a report in Business First of Louisville. Fresh Markets are located in 20 U.S. states, including Kentucky, Indiana and Tennessee.

With the addition of a new plant in Cincinnati, Graeter's has quadrupled its production capacity to 1 million gallons annually, the article said. It is now available in 41 states. (Source: Business First, May 19, 2011.)

Financier Burkle buys more Barnes & Noble stock

Takeover financier Ron Burkle and his Yucaipa American Management LLC fund spent $11.1 billion to buy 603,000 more shares of Barnes & Noble at a price of nearly $18.49 per share, the Denver Business Journal reported. The purchase puts Burkle in control of 19.7% of the bookseller's common stock, the report noted.

Liberty Media Corp. has offered $17 per share for a 70% stake in Barnes & Noble, the journal article said.

The Liberty Media offer came with the condition that Barnes & Noble's founding chairman, Leonard Riggio, stay with the company and continue owning its stock. 
Riggio held nearly 30 percent of his company's shares as of last fall, according to a filing with the Securities and Exchange Commission.

Burkle tried unsuccessfully in a proxy fight last fall to place three directors on Barnes & Noble's board and take the company private or try to merge it with Borders, the article said. (Source: Denver Business Journal, May 24, 2011.)

Family Business Publishing Company • 1845 Walnut Street • Suite 900 • Philadelphia, PA 19103 • (800) 637-4464