Veblen-area dairy co-op sued, votes to dissolve
Posted: Monday, December 03, 2007
ABERDEEN, S.D. (AP) -- Shareholders of a 4,000 cow Veblen-area dairy cooperative that faces a court challenge have voted 155-22 to dissolve the operation.
But before last week's vote, 10 shareholders who had sued the 10-year-old Multi-Community Cooperative Dairy asked a judge for an order to stop the proceedings. The judge has yet to rule.
In November, the 10 filed their lawsuit in Marshall County. It alleges that the MCC directors, officers and Rick Millner, the cooperative's general manager, "have grossly mismanaged the cooperative, breached their fiduciary duties and converted the cooperative's assets for their personal use," along with other allegations.
If the co-op dissolves, there's no guarantee the shareholders would get anything back on their investment in the co-op, said Steve Sandven, a lawyer representing the people who filed the lawsuit.
According to Millner, the suit is frivolous and without merit. "It's a bad-faith lawsuit."
Sandven said management added 85 family members to the list of stockholders just before the vote. The bylaws say dissolution requires 75 percent approval.
Millner said all the names on the stockholders list got there by following the co-op's bylaws.
"It is an important enough issue that we decided that was the direction we had to go," he said. "We had to assure dissolution."
As it turned out, the vote would have been 76 percent for dissolution even the new stockholders, Millner said, adding that the people who filed the lawsuit have shown they cannot get along.
"We have better things to do," he said. "The best way is to push it to a sale. This is taking the course it has to go. A divorce is needed."
But before last week's vote, 10 shareholders who had sued the 10-year-old Multi-Community Cooperative Dairy asked a judge for an order to stop the proceedings. The judge has yet to rule.
In November, the 10 filed their lawsuit in Marshall County. It alleges that the MCC directors, officers and Rick Millner, the cooperative's general manager, "have grossly mismanaged the cooperative, breached their fiduciary duties and converted the cooperative's assets for their personal use," along with other allegations.
If the co-op dissolves, there's no guarantee the shareholders would get anything back on their investment in the co-op, said Steve Sandven, a lawyer representing the people who filed the lawsuit.
According to Millner, the suit is frivolous and without merit. "It's a bad-faith lawsuit."
Sandven said management added 85 family members to the list of stockholders just before the vote. The bylaws say dissolution requires 75 percent approval.
Millner said all the names on the stockholders list got there by following the co-op's bylaws.
"It is an important enough issue that we decided that was the direction we had to go," he said. "We had to assure dissolution."
As it turned out, the vote would have been 76 percent for dissolution even the new stockholders, Millner said, adding that the people who filed the lawsuit have shown they cannot get along.
"We have better things to do," he said. "The best way is to push it to a sale. This is taking the course it has to go. A divorce is needed."
Story Comments
Read More and Post Comments 0 comment(s)
Please note: The following are comments from readers. In no way do they represent the views of The Sioux City Journal or Lee Enterprises. We will not edit or alter your comments, but we do reserve the right to not post or to remove comments that violate our code of conduct. No comment may contain potentially libelous statements; obscene, explicit or racist language; personal attacks, insults or threats. Terms of Service
