THE VIRGINIAN-PILOT
Copyright (c) 1996, Landmark Communications, Inc.
DATE: Tuesday, August 27, 1996 TAG: 9608270317
SECTION: BUSINESS PAGE: D1 EDITION: FINAL
SOURCE: BY STEPHANIE STOUGHTON, STAFF WRITER
LENGTH: 59 lines
AppleTree Cos. Inc., which distributes sandwiches to convenience stores, said Monday it has moved its corporate offices from Florida to Norfolk.
In the same announcement, the company said Paul B. Kravitz, its chairman and president, is retiring.
In a cost-saving move, the supplier said it has squeezed its operations into its Norfolk-based subsidiary, Stewart Sandwiches, which has a factory and offices off Curlew Drive.
Little detail about the corporate relocation was provided. The company, which has been based in Boca Raton, said Kravitz's chairman duties will be temporarily held by Allan C. Sorensen, a company director. Kravitz's position as president will go to John Donlevy, chief executive and chief operating officer.
The announcement came amid the latest corporate controversy.
It involves Kravitz and former vice president Elliott Barnett.
In a Florida lawsuit filed in June, two company founders claim Kravitz and Barnett contributed to, and then profited from, AppleTree's plummeting stock price.
No explanation was given for Kravitz's retirement, and AppleTree officials did not return telephone calls Monday.
But Kravitz's attorney, Todd Boyd of Miami, said the lawsuit had nothing to do with the retirement. Boyd said his client is happily living in Florida.
``He didn't want to move to Norfolk - not that there's anything wrong with Norfolk,'' Boyd said.
AppleTree, then known as Modami Services Inc., purchased Norfolk's Stewart Foods Inc. out of bankruptcy in December 1993. Stewart Foods is now known as Stewart Sandwiches.
Stewart employed more than 200 in 1994.
Soon after the deal was signed, Stewart Foods officials discovered that Modami had its own problems.
First, Modami was struggling after it touted a new yogurt product and then couldn't sell much of it. The company's losses also were stacking up.
In the midst of its financial troubles, the Florida company discovered $1.3 million missing from its coffers. It found the money in a checking account linked to co-founders Michael Salit and David Lobel, according a report filed with the Securities and Exchange Commission.
Salit, then the chairman, was fired two years ago. Lobel, the chief financial officer, left the company.
Now, both men claim they were wronged.
In a lawsuit filed June 4 in Palm Beach County Circuit Court, the pair claim Kravitz and Barnett ruined the company and caused its stock price to plummet.
Kravitz and Barnett ``weren't as interested in the company as getting money out of the company,'' said James W. Beasley Jr., attorney for Salit and Lobel. ``They set themselves up.''
Salit and Lobel are asking for about $8 million in lost stock value, Beasley said.
``The lawsuit is an absolute crock,'' said Boyd, who represents Kravitz. ``There's nothing to it.'' by CNB