Family Coffee Saga Grinds On In New Trust Battle at Farmer’s
The chairman of Farmer Bros., the Torrance-based coffee importer under siege from its outside shareholders, faces a new challenge from his nephew and longtime foe.
Steven Crowe last week filed a petition in L.A. Superior Court demanding the removal of Roy F. Farmer as trustee of four trusts holding a 9.8 percent stake of the company for the benefit of Crowe and his sister Janice.
Crowe accuses Farmer of “cold-hearted” attempts to misuse the trusts to “freeze out” his sister and mother, as well as himself. He alleges that Farmer, along with his son, Chief Executive Roy E. Farmer, have engaged in a “long and sordid tale of treachery” in amassing $300 million in cash in order to eliminate any chance that Crowe or other outside owners would seize control.
“Roy has used his power to hurt his own family,” said Crowe’s attorney, Adam Streisand. The company said it will not “respond to allegations concerning trust management.”
Back in 1981, the elder Farmer’s sister (and Steven Crowe’s mother) Catherine had to fight to gain a seat on the board, which she held until nearly two years ago.
Disgruntled shareholders have demanded more disclosure of company finances. They’ve also opposed Farmer’s use of an employee stock ownership plan to maintain control.
In December, the company successfully beat back a proxy fight led by Franklin Mutual Advisors, a unit of Franklin Resources Inc., seeking to reclassify the firm under the Investment Company Act of 1940.
Franklin Mutual hasn’t had a chance to review Crowe’s petition, says Brad Takahashi, a co-manager with the firm. But it may make some unspecified moves of its own this week.
The company reported earnings of $6 million in the second quarter ended Dec. 31, a 39 percent decline from the year-ago period. Revenues fell slightly to $54 million.
Genesis L.A. Economic Growth Corp., the socially responsible investment vehicle launched by former Mayor Richard Riordan in 1998, plans to raise another $100 million targeted at getting affordable housing built in Los Angeles.
The fund is Genesis L.A.’s third; the previous two are focused on industrial and commercial developments. The organization has had mixed success finding suitable investment opportunities in the city’s urban core.
The latest fund, launched this month, is called the Genesis Workforce Housing Fund. It will focus on building housing for families with incomes between $45,000 and $65,000. Interested developers are expected to buy land and construct homes without use of low-income housing credits.
The fund plans to raise money from banks, which are required under the federal Community Reinvestment Act to provide loans to people with low and moderate incomes.
“Working families are constantly being pushed out of the urban core and we want to encourage the creation of housing,” said Marci Wiseman, Genesis L.A.’s vice chairman and acting chief executive.
The non-profit’s first fund, the $85 million Genesis L.A. Real Estate Fund, is managed by Shamrock Capital Advisors. The fund provides gap financing in the form of mezzanine debt and preferred equity to projects in low- to moderate-income neighborhoods. Its projects to date include two commercial real estate units in Venice, rehabilitated office space in Hollywood and industrial parks in both Hawthorne and the San Fernando Valley.