EXHIBIT 99.6
IN THE COURT OF CHANCERY OF THE STATE OF DELAWARE
IN AND FOR NEW CASTLE COUNTY
_________________________________
x
STEVEN HOROWITZ and DINA :
HOROWITZ, on behalf of themselves
and all others similarly :
situated,
:
Plaintiffs, C.A. No. 15819
:
-against-
:
R. EUGENE CARTLEDGE, LEE B.
DURHAM, JR., ROBERT L. HARRISON, :
JAMES M. REED, DALE C. CRITZ, CLASS ACTION
ARTHUR M. GIGNILLIAT, JR., ROBERT : COMPLAINT
S. JEPSON, JR., ARNOLD TENENBAUM,
W. WALDO BRADLEY, JOHN D. :
CARSWELL, F. SPRAGUE EXLEY,
WILLIAM W. SPRAGUE, III, HUGH M. :
TARBUTTON, FLO-SUN, INC. and
SAVANNAH FOODS & INDUSTRIES, INC. :
Defendants. :
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_________________________________
Plaintiffs allege upon information and belief except
as to paragraph 1, which is alleged on knowledge, as follows:
THE PARTIES
1. Plaintiffs are and at all times relevant hereto
have been the owners of shares of the common stock of Savannah
Foods & Industries, Inc. ("Savannah" or the "Company").
2. Savannah is a corporation organized and
existing under the laws of the State of Delaware with offices
in Savannah, Georgia. Savannah is one of the largest sugar
refiners in the country, best known for Dixie Crystals, which
has a 20% market share. Savannah has approximately 28.7
million shares of common stock issued and outstanding which
trade on the New York Stock Exchange.
3. (a) Defendant R. Eugene Cartledge
("Cartledge") is and was at all relevant times Chairman of the
Board of Savannah.
(b) Defendant Lee B. Durham, Jr. ("Durham") is
and was at all relevant times a director of Savannah and is of
counsel to Clark Hill P.L.C., a law firm which serves as
general counsel to Michigan Sugar Co., a wholly-owned
subsidiary of Savannah.
(c) Defendant Robert L. Harrison ("Harrison")
is and was at all relevant times a director of Savannah and
President of Stevens Shipping & Terminal Co., a company which
conducts business with Savannah related to port activities
associated with the importation of new sugar.
(d) Defendant James M. Reed ("Reed") is and
was at all relevant times a director of Savannah and Vice
Chairman and Chief Financial Officer of Union Camp
Corporation, a company which provides packaging supplies to
Savannah (in 1996, amounting to $7.7 million). Defendant
Cartledge formerly served as Union Camp's Chairman and Chief
Executive Officer for approximately 8 years.
(e) Defendant Dale C. Critz ("Critz") is and
was at all relevant times a director of Savannah.
(f) Defendant Arthur M. Gignilliat, Jr.
("Gignilliat") is and was at all relevant times a director of
Savannah.
(g) Defendant Robert S. Jepson, Jr. ("Jepson")
is and was at all relevant times a director of Savannah.
(h) Defendant Arnold Tenenbaum ("Tenenbaum")
is and was at all relevant times a director of Savannah.
(i) Defendant W. Waldo Bradley ("Bradley") is
and was at all relevant times a director of Savannah.
(j) Defendant John D. Carswell ("Carswell") is
and was at all relevant times a director of Savannah.
(k) Defendant F. Sprague Exley ("Exley") is
and was at all relevant times a director of Savannah and a
senior executive of the Company.
(l) Defendant William F. Sprague, III
("Sprague") is and was at all relevant times President and
Chief Executive Officer of the Company.
(m) Defendant Hugh M. Tarbutton ("Tarbutton")
is and was at all relevant times a director of Savannah.
4. The individual defendants are in a fiduciary
relationship with plaintiff and the other public stockholders
of Savannah and owe to plaintiff and other members of the
class the highest obligations of good faith, fair dealing and
full disclosure.
5. The individual defendants are long-time social
and/or business acquaintances. For example, in addition to
serving as Savannah directors:
(a) Defendants Harrison, Gignilliat, Exley and
Tarbutton all serve together as directors of Nationsbank, N.A.
("South");
(b) Defendants Gignilliat and Tenenbaum serve
as directors of Savannah Electric and Power Company; and
(c) Defendants Tenenbaum and Bradley serve as
directors of First Union corporate entities.
6. Defendant Flo-Sun, Inc. ("Flo-Sun") is a
private company in Palm Beach, Florida and is one of the
largest producers of sugar in Florida. Flo-Sun is named
herein as an aider and abettor of the breaches of fiduciary
duty described herein.
CLASS ACTION ALLEGATIONS
7. Plaintiffs bring this case on their own behalf
and as a class action, pursuant to Rule 23 of the Rules of the
Court of Chancery, on behalf of all public stockholders of
Savannah, and their successors in interest, who are or will be
threatened with injury arising from defendants' actions as
more fully described herein (the "Class"). Excluded from the
Class are defendants herein and any person, firm, trust,
corporation, or other entity related to or affiliated with any
of the defendants.
8. This action is properly maintainable as a class
action because:
(a) The class is so numerous that joinder of
all members is impracticable. As of September 30, 1996 there
were approximately 3,000 stockholders of record located
throughout the United States.
(b) There are questions of law and fact which
are common to the class and which predominate over questions
affecting any individual class member.
(c) Plaintiffs are committed to prosecuting
this action and have retained competent counsel experienced in
litigation of this nature. The claims of plaintiffs are
typical of the claims of other members of the class and
plaintiffs have the same interests as the other members of the
class. Accordingly, plaintiffs are adequate representatives
of the class and will fairly and adequately protect the
interests of the class.
CLAIM FOR RELIEF
9. On or about July 15, 1997, Savannah announced
that it would merge with the domestic sugar operations of Flo-
Sun, a privately-held company run by the Fanjul family, and
Florida Crystals, a unit of Flo-Sun.
10. Pursuant to the terms of the transaction, Flo-
Sun and affiliated shareholders will own 58.5% of the new
entity, while Savannah public stockholders will own the
remaining 41.5%.
11. In addition, defendant Sprague will remain as
president of Savannah's sugar refining business.
12. Flo-Sun shareholders, pursuant to the terms of
the transaction, will receive supermajority voting rights and,
thus, will control 83% of the vote of the new entity.
13. It is impossible to value the transaction at
this time. However, in response to the announcement, the
price of Savannah common stock fell $2.94 or 16%, to $15.75
per share. Thus, it is evident that Savannah's public
stockholders will not receive a premium over Savannah's market
price although they will lose control over Savannah and its
valuable assets.
14. According to a July 16, 1997 article in the
Sun-Sentinel, the founding families of both Savannah and Flo-
Sun have worked together for years.
15. In fact, none of the individual defendants own
any substantial amount of stock in Savannah and thus have no
interests to protect as shareholders of the Company.
16. Flo-Sun is a privately-held company owned by
the Fanjul family. If the transaction is consummated, the
Fanjul family and affiliates will have control of the new
company. Thus, control of Savannah will have passed from its
public shareholders to the Fanjuls.
17. The consideration to be paid to class members
is unfair and grossly inadequate because, among other things:
(a) the intrinsic value of Savannah's common
stock is materially in excess of the consideration to be
received by Savannah's public shareholders in the transaction
giving due consideration to the Company's recent operating
results, the recent market price of the Company's stock and
Savannah's present and projected cash flow, and profitability;
(b) the directors of Savannah have failed to
maximize the value of its shareholders' equity by "shopping"
the Company, or conducting an auction of the Company or
seeking other alternatives to maximize shareholder value;
(c) Savannah's directors have failed to
conduct a market check to ascertain the highest price that
could be attained for Savannah stock in a change of control
transaction; and
(d) Savannah's directors have failed to
negotiate for an adequate premium for the sale of control of
Savannah.
18. As a result of the foregoing, the individual
defendants have breached their fiduciary duties owed to
Savannah's stockholders in a change of control transaction.
Defendant Flo-Sun, without whom this transaction could not
occur, has aided and abetted the breaches of fiduciary duty.
19. Unless enjoined by this Court, the individual
defendants will continue to breach their fiduciary duties owed
to plaintiff and the other members of the Class to the
irreparable harm of Class members who will be denied their
right to maximize the value of their investment in Savannah in
a change of control transaction.
20. Plaintiffs and the other members of the Class
have no adequate remedy at law.
WHEREFORE, plaintiffs demand judgment as follows:
(a) declaring this to be a proper class
action;
(b) ordering the individual defendants to
carry out their fiduciary duties to plaintiffs and the other
members of the Class by announcing their intention to:
(i) undertake an appropriate evaluation
of alternatives designed to maximize value for Savannah's
public stockholders; and
(ii) adequately ensure that no conflicts
of interests exist between defendants' own interests and their
fiduciary obligations to Savannah's public stockholders or, if
such conflicts exist, ensure that all conflicts would be
resolved in the best interests of Savannah's public
stockholders.
(c) preliminarily and permanently enjoining
the proposed transaction or awarding rescissory damages to the
Class;
(d) ordering defendants, jointly and
severally, to account to plaintiffs and the other members of
the Class for all damages suffered and to be suffered by them
as a result of the acts and transactions alleged herein;
(e) awarding plaintiffs the costs and
disbursements of the action, including a reasonable allowance
for plaintiffs' attorney's fees and experts' fees; and
(f) granting such other and further relief as
this Court may deem to be just and proper.
ROSENTHAL, MONHAIT, GROSS
& GODDESS, P.A.
By: _______________________________
Suite 1401, Mellon Bank Center
P.O. Box 1070
Wilmington, DE 19899-1070
(302) 656-4433
Attorneys for Plaintiffs
OF COUNSEL:
LOWEY DANNENBERG BEMPORAD
& SELINGER, P.C.
The Gateway
One North Lexington Avenue
White Plains, NY 10601
Tel: (914) 997-0500
Fax: (914) 997-0035
GOODKIND LABATON RUDOFF
& SUCHAROW LLP
100 Park Avenue
New York, NY 10017
Tel: (212) 907-0700
Fax: (212) 818-0477