A shareholder of Federated Department Stores Inc. filed suit against the company yesterday over what he claims are plans to liquidate its Fingerhut catalog operation, according to wire reports.
The lawsuit, filed in Hennepin County (MN) District Court, states that Federated has not made a good-faith effort to sell Fingerhut as a complete, operating entity, The Associated Press reported. Federated and its executives are accused of breaching their fiduciary duty to stockholders since Fingerhut, according to the lawsuit, is worth more to buyers intact. The lawsuit further alleges that Federated prefers a liquidation of Fingerhut to conceal losses incurred since the purchase.
According to the report, monetary damages are not being sought. However, the court is being asked to force Federated to solicit buyers and fairly consider offers for the company, said Patrick Daniels, a San Diego-based attorney representing Nick Wesenberg, a 17-year Fingerhut warehouse employee in St. Cloud, MN, who owns 200 shares of Federated stock.
Federated will liquidate Fingerhut's assets at a price not reflective of its value without intervention by the court, according to the report.
A dozen potential buyers are interested in the Fingerhut operation. Federated has refused to disclose details regarding the only offer so far, which was made a week ago. Earlier this week, former Fingerhut CEO Ted Deikel expressed interest in participating in an effort to save Fingerhut.
Carol Sanger, vice president of corporate affairs at Fingerhut parent company Federated Department Stores, Cincinnati, provided no specifics on when a decision will be made on last week's bid.
“It will take as long as it takes,” she said. “There are a number of people who indicated that they are interested. We are going to wait and see if those who have said they are interested are going to make an offer. We're not going to be rushing this process. Any offers that are made will be thoroughly reviewed, and we will be involved in rather intense conversations [and] negotiations with any party that submits an offer.”