Roanoke Times
Copyright (c) 1995, Landmark Communications, Inc.
DATE: WEDNESDAY, March 22, 1995 TAG: 9503220055
SECTION: BUSINESS PAGE: B-8 EDITION: METRO
SOURCE: STAFF AND WIRE REPORTS
DATELINE: LENGTH: Medium
The lawsuit, filed in U.S. District Court in Roanoke and transferred to Danville, seeks to block the bank from selling the newspaper to any entity other than an employee stock ownership plan, or ESOP.
Elizabeth Stuart James Grant, the newspaper's publisher, ``was adamant in her desire to sell the stock of the company to its employees upon her death; and the bank, as executor and trustee, has been fully aware of this desire at all times,'' the lawsuit said.
American National Bank & Trust Co. has been executor of Grant's estate since she left the newspaper to nine charities and schools on her death in August 1990.
``We have acted properly, and we believe the court will agree,'' the bank's president, Charles Majors, said Monday after the suit was filed in Danville. ``We look forward to a prompt resolution.''
The bank is preparing to seek sealed bids for the purchase of the newspaper after at least two agreements for its sale collapsed. One was a letter of intent with employees and another was an agreement with Charles A. Womack Jr., publisher of a chain of weeklies.
In January, the bank said it was prepared to receive and evaluate bids and reportedly had received interest from four newspaper companies: Byrd Newspapers of Winchester; Landmark Community Newspapers Inc. of Shelbyville, Ky.; the Martinsville Bulletin, and Media General Inc. of Richmond.
Landmark Community Newspapers operates a chain of small daily and weekly newspapers and is a division of Landmark Communications Inc. of Norfolk, parent of the Roanoke Times & World-News.
The employees' lawsuit was filed after about 90 of the Register & Bee's 118 workers signed a petition that was circulated companywide, according to Mike Browning, the newspaper's production manager.
Also suing are ESOP trustees Robert T. Vaughan Jr., a local lawyer, and Henry I. Slayton Jr., a longtime friend of Grant's.
``The committee asked the [ESOP] trustees to retain counsel and vigorously pursue all available claims against the bank and any other responsible parties with the goal of effecting the ESOP purchase of the stock in the company,'' Browning said in a statement.
According to the lawsuit, ``The employees of the company, as beneficiaries of the plan, have formally requested the ESOP trustees to bring this action so the employees can obtain what Mrs. Grant wanted and what the bank promised: the purchase of the company for its fair market value.''
Last August, American National signed an agreement to sell a majority of the Register & Bee to an ESOP and the rest to Womack and his group of investors, but the bank terminated the sale in early January after Attorney General Jim Gilmore intervened.
Gilmore questioned whether the bank acted in the best interests of Grant's beneficiaries in selling to Womack.
``The bank has gotten into a position where it has conflicting duties,'' said William R. Rakes, a Roanoke trial lawyer who is handling the case for the employees.
American National ``has responsibility to the beneficiaries of [Grant's] will, and also to employees because the bank owns all the stock,'' Rakes said.
by CNB