The Bahres acquired about a 40% interest in the company in 2006 and said they have been denied a seat on the board of directors. The directors are CEO Harold Jones; his daughter Jinger Duryea, president; son Kurt Jones, treasurer; son Grant Jones, senior vice president; Charles "Chick" Wilkins, vice president and general manager. The allegations include misapplying and wasting corporate assets. The Jones family has more than a 52% interest in the South Paris, Maine-based company, which has between 800 and 900 employees and operates more than 90 Big Apple food stores, 10 car washes and 34 Red Shield heating oil offices in northern New England. It services more than 150 gas stations in Maine, New Hampshire and Vermont.
Bob Bahre "was looking for a way to make a big profit," said C.N. Brown attorney Stephen Langsdorf. The Bahres acquired a 40% interest in the company in 2006 and said they have been denied a seat on the board of directors. The stocks are privately held.
"We think this case was brought because [Bahre] doesn't like being a minority shareholder without control of the company, and he wants a way to make a profit," Langsdorf told the newspaper.
The Bahres ask that the court dissolve the company an appoint a receiver to liquidate its assets, if its proven that the directors or those in control of the corporation have acted, are acting, or will act in a manner that is illegal, oppressive or fraudulent and/or the corporation assets are being misapplied or wasted, according to the complaint.
"The statute is called the dissolution statute. It gives the judge broad discretion," attorney Christopher Coggeshall told the paper. "It doesn't mean they're going to dissolve the corporation or that it would be dissolved. What is likely is the Bahres will be bought out or an independent management may be put in place, or the company will be sold to a third party."
Under state law, the court could grant relief other than dissolution by selling shares of any shareholder, selling all the corporation's property and franchise to a single purchaser, canceling or altering provisions contained in the company's articles of incorporation or appointing a receiver who has no company ties as an additional director for no longer than two years, said the report.
"It's much more likely either the Bahres would be bought out, perhaps new management would be brought in or the company could be sold out. These are all possibilities," Coggeshall said.
The Bahres said their lawsuit is not intended to put its hundreds of employees out of work. "I think that would be very unlikely. Never say never, but it's not what they're seeking," Coggeshall added.
The directors spent about a year marketing the company, but failed to find a buyer that would make a company sale viable, Langsdorf said. Several potential buyers, local and "not so local," expressed interest in the company, he added.
The Bahres filed a complaint against the company and its five-member board of directors, claiming they engaged in "illegal, oppressive or fraudulent behavior," said the report. Langsdorf said the company denies the allegations.
In its answer to the lawsuit, C.N. Brown contends the Bahres were able to buy company shares at a "deep discount" because of an estate tax liability and they made every effort to make an "exorbitant" profit on their investment.
On March 3, C.N. Brown claimed, the Bahres threatened to file the lawsuit unless an agreement was made within two days to pay an "exorbitant and non-negotiable price" to them for their shares.
Langsdorf said he did not have the exact amount that was requested, but said it was "a lot more than [Bahre] invested" and that the amount was "outrageous."
The company, according to the report, has filed counterclaims against Bob and Gary Bahre, asking for damages, injunctive relief and other remedies as a result of what it claims is the Bahres "misappropriation of trade secrets, breach of fiduciary duties owed to C.N. Brown, tortious interference, trade libel, commercial defamation and other improper conduct."
The counterclaims include a request for injunctive relief to prevent the Bahres from disparaging C.N. Brown and revealing further trade secrets and confidential business information and for commercial defamation and disparagements.
"It's pretty much what we expected," Coggeshall told the paper.
The Bahres have asked that the case be moved from Oxford County Superior Court to the Business & Consumer Court in West Bath, Maine.
Langsdorf said C.N. Brown remains strong and competitive and that its move to put the company on the market was not because of financial difficulties. "C.N. Brown is doing very well," he told the Sun Journal. "It's a strong company and [Bahre's] claim the company should be dissolved is solely one to benefit him personally."
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