New Glarus Brewery and CEO sued by shareholders
A handful of New Glarus Brewery shareholders have sued the New Glarus Brewery and President/CEO Deb Carey in Dane County circuit court, according to a release from Palmersheim Dettmann S.C., the firm representing the shareholders. Karin Eichhoff, Steven Speer, and Rod Runyan were original investors in the brewery and represent the largest block of shares owned outside of Deb Carey, who is the sole member of the corporation’s board of directors and its controlling shareholder. The 43-page complaint includes allegations regarding the brewery and Carey that include:
- Carey used company money and resources to establish a distillery that was designed to be owned by the brewery, but instead was transferred to Deb and her husband Dan Carey;
- Carey used company money and resources to set up her nonprofit family foundation, and changed internal shareholder rules so that shareholders could not donate shares to any charity other than Carey’s;
- The brewery retained over $100 million, with over $40 million in cash, and spent large sums in support of Carey’s interests and agenda;
- Management withheld and manipulated financial and valuation data, and used brewery money to buy the minority shareholders’ voting shares at low values to retain and bolster Carey’s voting majority; and
- Carey threatened that if the minority shareholders did not agree to the new stock transfer restrictions, or the preferred status of her family foundation, that Carey would arrange to sell her shares to the highest bidder and freeze the minority shareholders out of the sale.