The December 2010 sale of polypropylene and polystyrene foam manufacturer Createc Corp. to Tegrant Corp. has led to a commercial litigation suit. The plaintiff, who was a shareholder in Createc, claims her brother and mother, who were also shareholders, sold the company without informing her.
The complaint alleges that the mother and brother not only committed fraud, but also violated securities laws in their state. Createc sold for $61 million, but the sister only received $1.5 million. Her mother made $15 million, while her brother made $12 million on the sale.
Createc was split among shareholders in a divorce settlement in 2000, but in 2007, the brother purchased his father’s shares. The plaintiff states her brother used a company line of credit for the $6 million purchase. She also says in her suit that she was not notified of the sale until the day before it was scheduled to close. Because of the divorce settlement, the sister claims she had a right to buy her mother’s shares, just as her brother purchased their father’s shares.
The attorneys for the defendants believe there is no merit to the case and have stated they wish a resolution could have been found without going public. Currently, the case is scheduled for mediation on Feb. 13.
Two additional defendants have also been named in the lawsuit. Both Individuals had minority shares in Createc and were executives within the company when it was sold.
When Createc was purchased by Tegrant, it operated four plants – one in Mexico and three in the United States. Late last year, Sunoco bought Tegrant for $550 million.
Source: Indianapolis Business Journal, “Sale of family-owned business leads to lawsuit,” Scott Olson, Jan. 28, 2013
