It didn't take long: Bye-bye, Albertson's, hello SuperValu. A surprisingly light vote of 60 percent of Albertson's shareholders voted "OK" to the sale of the Boise company at a meeting in New York Tuesday.
But before Albertson's CEO Larry Johnston can pick up his payoff from the sale (estimates of his severance package range from $50 million to $100 million), he and the other members of the Albertson's board of directors face some legal challenges. They've already settled one class-action suit filed by investors because the Albertson's board rejected a purportedly better offer than the one they ultimately took from SuperValu--it would have kept Albertson's headquarters in Boise and paid 14 percent per share more for the company--and now they face another suit.
This time, the plaintiff is a former Albertson's grocery clerk suing, in essence, on behalf of the company. Frank Nordby, who is also a shareholder, has a more than 20-year history with Albertson's and other grocers. In his suit now before the Fourth District Court of Idaho, Nordby is represented by Boise law firm Greener Banducci Shoemaker, and the Seattle firm Keller Rohrback. But Nordby's isn't a class-action suit; he's instead filing a case that asserts the company was wronged by a climate of "corporate greed," according to his complaint. Nordby's Boise attorney Tom Banducci said it will be a tough case; he has to prove the board used lousy judgement and, in the words of his co-attorney Richard Greener, "drove the company into the ground."
Nordby's suit makes for some wild reading. Cases like his are less common than class-action suits, where a group of people wronged by a corporation file together. His "derivative" suit is filed on behalf of a company that, Banducci said, was itself done wrong by the board. In the 30-page complaint, Nordby's attorneys state that Johnston and his board sorted apples while Albertson's rotted, abandoning sensible management. The suit even claims that Johnston "was having an illicit relationship with an Albertson's employee," which, the attorneys assert, would violate company policy.
The suit relies heavily on media reports from the Idaho Statesman, KTVB Channel 7 and even BW to get at the immensity by which Johnston was paid. It alleges, among other things, that Johnston fostered "a culture of fear and intimidation," where high-ranking employees who challenged or disagreed with Johnston were "cut out, isolated, or ultimately terminated."
Ultimately, Nordby hopes to redirect Johnston's money, back to the corporation. For now, though, it's Johnston who is smiling, with shareholders--at least, a few of them--at his back.