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The family stock dispute ends with an undisclosed settlement. Now the company turns its sights to rebuilding its empire.
By SCOTT BARANCIK, Times Staff Writer
© St. Petersburg Times, published January 25, 2002
TAMPA -- The rare public fracas between members of the Lykes family is over. And, true to their traditionally secretive form, members of the prominent family aren't sharing their truce terms.
Two years after family-owned Lykes Brothers Inc. of Tampa filed suit against a group of relatives who wished to unload their stock, the two sides said Thursday they have reached an out-of-court settlement.
Terms of the deal were kept confidential. But the company evidently will pay its former stockholders between $23-million and $103-million. That's how much their respective attorneys had contended the shares were worth.
Howell Ferguson, chief executive of the more than 100-year-old company and a great-grandson of its founder, said Lykes Brothers will be able to pay the debt without selling any land or businesses. The company does not plan to resell the stock it purchased, which means the 74 percent of shares that remain will be worth more.
"There's certainly a good mood in the air on our side," he said.
The suit's resolution is not just the end to a mortifying family feud. It's a green light to resume rebuilding the Lykes family empire, Ferguson said.
If so, he has a long way to go. In decades past, Lykes Brothers and its family-owned affiliates were among the leading economic players in Florida and beyond, owners of everything from banks and a steel company to an orange juice factory and the world's largest steamship line. They were Tampa's richest family.
"It's been a privately held company that's had a very big presence in this area," said Hillsborough Circuit Chief Judge Manuel Menendez Jr., a Tampa native who presided over the just-resolved case. "I remember Steve Spurrier doing commercials for Lykes hot dogs, the hot dogs sold at stadiums."
But most of its best-known holdings have been sold over the years. Even Lykes brand hot dogs are now made by somebody else.
What remains of the empire -- a passive landowner -- is arguably a pale shadow of the family's former glory. Company officials strongly disagree.
"We have land, lots of it," Lykes Brothers attorney Beth Waters said. "We have an insurance agency; we have a fertilizer company; we have a cattle ranch; and we have a lot of, you know, varied operations with respect to the land. We grow pine, we grow eucalyptus, there's mining. I mean, there's several operations." Sugar cane is also grown on company land.
Ferguson said the company might begin its expansion by growing its insurance business, citrus groves and cattle ranches.
"Seventy-five percent of our shareholders, who have always wanted to continue with the family company, are now able to move forward with a clarity and a cohesiveness as we build our existing businesses," he said, "and as we continue to look for new opportunities, which has been our tradition for the last hundred years."
The Lykes Brothers lawsuit began two years ago when family members owning 26 percent of its shares exercised a legal option to sell their shares, then balked at the price their relatives offered.
The dissenters claimed their option to sell was triggered when Lykes Brothers elected to sell its citrus juice processing business, a core asset. The company disagreed. Phone calls Thursday to several former Lykes Brothers shareholders were not returned.
-- Scott Barancik can be reached at barancik@sptimes.com or (727) 893-8751.
A brief chronology of the legal battle among shareholders of family-owned Lykes Brothers Inc. of Tampa.
April 7, 1999: Lykes Brothers Inc. board of directors votes unanimously to sell a key asset, a troubled juice-processing unit in Pasco County.
June 5, 1999: At a specially convened meeting, shareholders holding 74 percent of company stock okay the juice unit's sale; dissenters holding the remaining 26 percent abstain. Sale triggers a state law that gives shareholders who oppose the sale of a key asset an option to cash out.
July 15, 1999: Lykes Brothers offers $4,178 per share, which dissenters reject as too low.
Dec. 22, 1999: Lykes Brothers Inc. files suit against dissenters. Company argues its original offer was generous, and says dissenters may not be legally entitled to a payout in any case.
Oct. 29, 2001: After many failed settlement attempts, trial opens. Lykes Brothers maintains dissenters are entitled to $5,330 per share, or $23-million total. Citing their own valuation, dissenters demand $23,700 per share, or $103-million total.
Nov. 13, 2001: Litigants ask judge for recess to try to settle case. Judge agrees.
Jan. 11, 2002: Attorneys for both sides reach tentative agreement on settlement terms. Proposed settlement is sent to all dissenters for signature; deal is approved unanimously.
Jan. 23, 2002: Chairman and chief executive Howell Ferguson signs settlement papers on behalf of company.
Jan. 24, 2002: Lykes Brothers and former shareholders announce they have reached a confidential, out-of-court settlement.
-- Source: Lykes Brothers Inc., Holland & Knight, court documents