The founder and president of New Glarus Brewing Company says she can “breathe a sigh of relief” after an appeals court upheld an earlier decision dismissing an investor lawsuit against the business.
In an interview yesterday, Deb Carey described the two-year legal battle as a “long and kind of heartbreaking journey” that has cost her millions of dollars.
Plaintiff shareholders Karin Eichhoff, Steven Speer and Roderick Runyan filed a lawsuit against Carey and the company in March 2022 alleging “minority shareholder oppression” and securities fraud, according to court documents. Among other claims, the plaintiffs argued Carey and the brewery “misrepresented” or didn’t disclose information on the value of their shares, denying them the opportunity to obtain “fair value” in selling them, the documents show.
The plaintiffs sought an order requiring Carey and the brewery to purchase their shares at “fair value,” independent directors to be appointed for the business and all non-voting shares in the company be reclassified as voting shares.
But the appeals court last week concluded Green County Judge Faun Phillipson “properly dismissed” the lawsuit, which Carey argues was a form of harassment.
“The knife over our head was, you know, were they going to find something where they could bully me into selling, or leaving? … This was a long fight,” she said. “And now we can all breathe a sigh of relief that all of those ideas that they had, that they were going to get more money, have been shot down. And life will move on.”
In an emailed statement on the decision, Speer said he is “shocked and disappointed that the frustrations we brought to the court as minority owners” weren’t seen as shareholder oppression.
“In my reading of the opinion, it seems the judges decided, among other things, that as a minority owner I could have no reasonable business expectation of ever participating in the profits of the corporation no matter how profitable it is or how much undistributed profit simply sitting in cash is accumulated by the business,” he said.
Neither of the other plaintiffs or the law firm representing them, Middleton-based Palmersheim Dettmann, responded to requests for comment on the appeals court’s decision.
Carey argues some of the plaintiffs’ claims were “painfully absurd,” such as accusing her of stealing from the company’s Only In Wisconsin Giving charity program.
“Charity tax returns are very public, and so again, super easy to prove that the charity is set up and employees are running it and I’m really not involved at all,” she said. “And I certainly am not taking any money. But what a hideous thing to say, you know? It just is, everything about this I think was meant to inflict pain.”
See the New Glarus release and the appeals court decision, and see more on the lawsuit in Top Stories below.
–By Alex Moe
