A battle for control of Farmer Brothers escalated Thursday amid accusations that the company misled investors about the accounting background of a board member who heads its audit committee.
In a letter to the Farmer board, the Save Farmer Bros. shareholder group, which is seeking three board seats, says the coffee producer and distributor mistakenly stated in public filings for three straight years that Christopher Mottern, a former CEO at Peet’s Coffee & Tea, “is a certified public accountant.” It noted that the wording in a recent proxy statement was changed to “was a certified public accountant” after the group said it could not verify that Mottern was a CPA.
In a statement, the company said Mottern received his CPA certification in Connecticut in 1971 after graduating from college and then worked for the Peat, Marwick & Mitchell accounting firm. It says his many years of experience as a CEO and finance executive qualify him to lead the audit committee.
“In stark contrast, the Waite Group’s nominees lack the qualifications or experience necessary to protect the interests of all stockholders and have deep personal ties to the Farmer family that would undermine the independence of the Board,” the company said.
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Save Farmer Bros. was formed by Carol Farmer Waite, the granddaughter of the company’s founder, who has criticized decisions by CEO Michael Keown, including relocating the century-old company from Torrance, Calif., to Texas.
The allegation comes less than a month before Farmer shareholders will decide whether to back the dissident group’s slate of directors or stick with the company’s three members standing for re-election. The shareholder meeting is set for Dec. 8 at the Marriott Hotel at Champions Circle in far north Fort Worth near Texas Motor Speedway and the new headquarters under construction in Northlake.
Farmer Brothers is urging shareholders to reject the change in direction, saying that its turnaround plan is working and that the corporate relocation will produce annual cost savings up to $20 million.
Management also contends that Jonathan Waite, the son of Carol Farmer Waite, helped plan the corporate relocation as part of an employee team and has supported the move, despite now being part of Save Farmer Bros.
Farmer Brothers, which makes and supplies coffee to restaurants, hotels, casinos and other food-service providers, expects to employ about 300 workers at a 538,000-square-foot facility being built on the east side of Interstate 35W north of Texas 114. The facility will include administrative offices, a manufacturing area where coffee beans will be roasted and packaged, and a distribution area.