Equity Group Holdings Inc., the Washington investment firm that has been trying to take over Easco Corp., has won its fight to get a copy of the Baltimore hand-tool company's list of stockholders.
Easco had refused to give Equity Group the list, and argued that under Maryland securities law a company does not have to make its shareholder list available to an investor who has not held 5 percent of the comapny's stock for at least six months.
But Equity Group, which is not yet able to meet that requirement, hired D. F. King, a Wall Street firm that specializes in stockholder canvassing, to ask Easco investors whose shares are held by various brokerage firms to join Equity Group in requesting the list.
Equity Group's sole partners, Stephen M. and Mitchell P. Rales, said the solicitation was successful. "It was not an unusual way to get a requested stockholder list," said Equity Group lawyer Stephen Banker, an attorney at Skadden, Arps, Slate, Meagher & Flom.
The Rales brothers then renewed their demand for the Easco stockholder list. Lowell R. Bowen, one of the Easco attorneys, said the list would be provided to Equity within 20 days of its request, in accordance with Maryland law.
Earlier this year, the Rales brothers, who are now Easco's largest stockholder with a 17.7 percent interest in the firm, offered $18.50 a share or about $170 million for the Easco stock they do not own. Easco's management turned down the offer as "inadequate," prompting the Rales brothers to propose their own slate of directors and seek to replace management with their nominees to Easco's board.
In a bid to thwart the Rales brothers' attempt to gain control of the company, Easco filed suit in January in federal court in Baltimore charging that the investment group violated federal securities laws.
The Rales brothers have charged in a counterclaim to that suit that Easco had violated state securities laws by preventing them from obtaining the stockholder list. They also alleged that Easco's directors violated Maryland securities laws by making changes in corporate rules that limit a stockholder's ability to bring new business before an annual meeting of the shareholders.
The proxy contest should be heating up before there is any court action on the litigation, one of Easco's lawyers said.
In February, the Rales brothers asked Easco for a stockholder list so that they could present their case to the firm's shareholders. Equity said that it intends to use the list to solicit proxies for Easco's 1985 annual stockholders meeting.
The date for Easco's 1984 meeting was set Jan. 31, 1984, but the company has not announced a date for its 1985 meeting so far this year. Easco's attorneys said that the company bylaws provide that the stockholder meeting be held within 15 days before or after April 30. The meeting probably will be held in late April or early May, they said. The Rales brothers have said the failure of Easco to announce a date for the 1985 annual meeting is a significant deviation from past practice.
Maryland law requires that shareholders be given at least 10 days' notice, but Easco attorney Bowen, said that when proxy material is involved, about 30 days' notice is more practical.