A stockholder lawsuit seeking to block the takeover of the Great Atlantic & Pacific Tea Co. by a German retail company was filed yesterday in New York.
Contending that the Tengelmann Group violated securities laws and defrauded minority stickholderd when it acquired 42 percent of A&P'S stock earlier this year, the lawsuit seeks to force Tengelmann to up its interest in the troubled supermarket chain.
The lawsuit was filed by attorneys from the Louis Nizer law firm on behalf of two A&P shareholders, Edgar Stromfeld of New York and Sol Zisook of Wilmette, iii.
Tengelmann, a privately owned, $3-billion-a-year German retail chain with 3,000 stores in Europe, agreed last january to pay nearly $80 million for the A&P stock owned by four heirs of the chain's founder, Huntingon Hartfore, and others.
Contending the deal involved "numerous violations of the federal securities laws and breaches of fiduciary duty," the dissident stockholders sued A&P, Tengelmann's American subsidiary the Hartford heirs and Dillion Read & Co., the investment bankers who arranged the transaction.
The complaint charges that Tengelmann made false reports to the Securities and Exchange Commission by claiming that it did not intend to take control of A&P and change its management. Filed on behalf of all A&P shareholders, the suit asks the federal courts to block Tengelmann interest from voting the 7.2 million shares of stock acquired and to stop their purchase of an additional 3.1 million have option.