The annual meeting that wouldn't end finally did.
Alleco Inc., which started its annual meeting as Allegheny Beverage Corp. on Sept. 28 at the Sheraton-Carlton Hotel with about 75 shareholders in attendance, ended it yesterday in the employe cafeteria of its Cheverly headquarters with about 10 shareholders present.
In between were three attempts to hold the annual meeting, each quickly adjourned because of delays in a major corporate transaction that was the main business of the meeting; a name change, and assorted financial and legal problems.
A sign in the company cafeteria, where bologna sandwiches sell for $1.65 and sliced turkey and roast beef for $1.85, noted that the facility is managed by Service America Corp., a food-service company that is Alleco's only subsidiary.
It was Service America that was the first order of business yesterday. Alleco officials announced that holders of about 53 percent of the company's stock had voted to sell Service America to Servam Corp. for $375 million in cash and the assumption of $105 million of the company's outstanding debt.
The final vote on the sale had been postponed repeatedly because of changes in the terms of the sale and the turmoil in the stock market.
Morton M. Lapides, chairman and chief executive of Alleco, said yesterday that the sale of Service America to Servam Corp. -- a group including investment bankers and senior managers of Service America -- could be finalized within the next several days.
However, the New York investment banking firm Salomon Brothers said in a Securities and Exchange Commission filing late yesterday that it holds the equivalent of a 9.5 percent stake in Alleco. The company said in the filing that it has asked Alleco to remain liable for paying the principal and interest on a debt issue that Alleco has proposed transferring to Servam as part of the sale.
Salomon Brothers said in the filing that it may communicate with other holders of Alleco debt or seek to intervene in an action in federal court in Minnesota, where Alleco officials have asked for a ruling on the plan for transferring the debt.
Salomon said it also might sell or convert its stake, which consists of $18.5 million in convertible debentures, or buy additional Alleco securities.
If the sale of Service America goes through, it will leave Alleco as a corporate shell, with no operating subsidiaries but with millions of dollars in cash.
Lapides has said Alleco plans to use the money to invest in new businesses. "We're not going to go back into the food business or the soft-drink business," he said yesterday. "It will be studied. We're not going to just jump."
Allegheny began as the Pepsi-Cola bottler for the Baltimore area and grew to be one of the 20 largest local companies before divesting itself of vending-machine, office furniture and laundry services businesses over the past several years.
The divestiture began after the company incurred a huge debt buying Servomation Corp. in 1985 for $225 million. Service America resulted from combining Servomation with Allegheny's Macke food-service subsidiary.
In the downsizing, the company has shrunk from 32,000 employes at the end of last year to about 50.
Alleco lost $9.2 million in the first half of this year, on top of a $59 million loss last year. The company's stock closed at $7.75 a share yesterday, up 50 cents but less than half its high for the year of $16.62 1/2.
"We all want to start showing a profit," Lapides told the handful of shareholders at yesterday's meeting. "It's been a horrendous two years."
In addition to the company's financial difficulties, Alleco has been beset by legal problems. The company has set aside between $5 million and $6 million for possible settlement of a suit brought by shareholders who claim that Alleco directors withheld information about the company while they sold stock at high prices.
In addition, Morton Lapides was indicted in U.S. District Court in Norfolk in October for an alleged conspiracy to set soft-drink prices between 1982 and 1985, when Allegheny owned the local Pepsi franchise. Lapides has said that he is not guilty of the charges and will fight the indictment.