Envirodyne Industries Inc. filed a lawsuit April 24 in U.S. District Court in Chicago against its largest stockholder, Zapata Corp., and two Zapata officials. The suit seeks injunctions to stop Zapata from attempting to gain control of Envirodyne.
The suit follows an April 18 suit filed by Houston-based Zapata in U.S. District Court in Houston. Zapata's suit seeks to block a plan by Envirodyne to remove Zapata's controlling stockholder, Malcolm Glazer, and his son, Avram Glazer, president and chief executive officer of Zapata, from Envirodyne's board of directors.
Envirodyne of Oak Brook, Ill., operates through wholly owned subsidiaries involved in the food packaging and food-service supplies markets: Viskase Corp., Clear Shield National Inc. and Sandusky Plastics Inc. make bags, films, cellulosic casings, cutlery, dining kits and thermoformed dairy containers.
Zapata, founded by former President George Bush, provides marine protein services and explores for, develops and produces oil and gas. It also owns 5.9 million shares of Envirodyne's common stock, or 40.4 percent.
Earlier this year, Envirodyne decided to reduce its number of board members from seven to five. According to an Envirodyne news release, the Glazers were not slated for re-election because they refused to say that they would not seek control of the board for the next 12 months.
Edward Gustafson, Envirodyne chairman, president and chief executive officer, charged that the Glazers were attempting to gain control of Envirodyne without paying the stockholders for the transaction.
``We believe that what you are attempting to do through this blatantly self-interested and ill-advised action will be detrimental to other shareholders,'' Gustafson wrote in a letter to Malcolm Glazer. ``We will do everything we can to prevent you from gaining control at their expense.''
Zapata officials did not return telephone calls. However, Zapata stated in a March 25 news release that its board had decided to change its strategy of repositioning the firm into the food-service industry and pursue a multi-industry strategy that includes expanding into other businesses as opportunities arise.
The board recently had considered, then rejected, a proposal to sell the firm and ``is currently pursuing a possible significant acquisition,'' the release said.
Zapata's food-services operations are conducted through Envirodyne.
Zapata filed preliminary proxy materials with the Securities and Exchange Commission laying out plans to nominate its own directors to the five-member Envirodyne board. They are Malcolm and Avram Glazer and Robert Leffler Jr., who handles the Glazers' public relations.
Gustafson compared the move to a recent Zapata attempt to merge with Houlihan's Restaurants Group Inc. Stockholders thought the deal unfairly favored Malcolm, and Zapata subsequently abandoned the merger.
Despite the competing lawsuits, Envirodyne plans to move ahead with the board elections at the company's May 16 annual meeting.
``We have told the Glazers that we are prepared to consider any bona fide proposal to acquire control of the company at a fair price,'' Gustafson said in a news release.
Malcolm Glazer also is owner of the Tampa Bay Buccaneers. Zapata reported sales of $95.7 million for the year ended Sept. 30.
Envirodyne, with 4,900 employees, reported sales of $651.4 million for the year ended Dec. 26.