AriZona Beverages May Buy Out Partner

WOODBURY, NY

The victorious management team at AriZona Beverages will be permitted to buy out disgruntled partner John Ferolito following a decision this week by the New York State Supreme Court Appellate Division.

The court, which affirmed an earlier ruling by the New York Supreme Court in New York County, ends a four-year legal battle and effectively prevents the sale and dissolution of AriZona, a family-owned business under the direction of Chairman Don Vultaggio.

The two partners, who founded the company in 1971, have been in court for nearly a decade with Vultaggio seeking to prevent Ferolito from selling his half of the company’s shares to Tata Global Beverages, Nestle SA and Coca-Cola Co.  and possibly other suitors.

In a press release following the July 25 decision, the company, which employs 1000, praised the decision “which helps protect hundreds of jobs in New York State.” The release stated Ferolito “is a "shareholder in name only" who “actively sought to sell his shares in AriZona to the highest bidder, with no regard for employees nor for the entrepreneurial spirit upon which the company was founded.”

The court “recognized the obligation of law to protect citizens from the abuses of an individual who is concerned only with his own personal profit with no sensitivity to impact.”

"Simply put, without an explicit and unequivocal agreement to the contrary, a shareholder who petitions for dissolution should not have the ability to veto the corporation's election right," Associate Justice John Sweeny wrote. "To do so would fly in the face of logic as well as the purposes of the statutory scheme enacted by the Legislature."

"We are pleased with the decision handed down yesterday by the Appellate Court," said Vultaggio. "The Court made plain that AriZona Iced Tea is not a deep pocket to be toyed with by a shareholder in name only, but it is a real business with real people who work hard every day making their livelihood by putting out a great product. This company is a testament to them and to our community. Justice Shulman understood that, and the Appellate Court understood that and did the right thing."

AriZona Beverages which holds a dominate market share in the iced tea category is valued at $4 billion. The action is believed to be the largest private company dissolution case in New York State history.

Source: AriZona Beverages

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