Burkle Returns to Stater Bros.; 2 Officials Quit

Stater Bros., the Colton-based grocery company that is embroiled in a legal battle with its ousted chief executive, on Monday named Joe S. Burkle to the posts of executive vice president of the company and vice chairman and chief operating officer of its wholly owned subsidiary, Stater Bros. Markets.

The company also announced the resignations of Richard C. Moseley and H. Harrison Lightfoot, two vice presidents who are members of an investment group seeking control of the company. That group, La Cadena Investments in San Bernardino, is headed by ousted President and Chief Executive Jack H. Brown.

Former President, Chairman

In a phone interview, Brown said the return of Burkle precipitated the resignations of Moseley and Lightfoot.

“The fact that Moseley, a 33-year veteran, and Lightfoot, a 32-year employee, both advised (Chairman Bernard R.) Garrett that they would not work for Mr. Burkle and left (the office) at 10 a.m. says more than any comment I could make,” Brown said.

Brown was named in 1981 to succeed Burkle, who had served as president and chairman since 1969.

Also on Monday, shareholders began receiving copies of a proxy statement and letter from Brown urging them to cast their votes for La Cadena’s slate of directors. Brown is mustering support in advance of the company’s annual meeting scheduled for March 20. However, in a statement last Friday, Garrett indicated that the board is weighing a postponement.

Brown said his group has boosted its stake in the company to just over 41% from 39.87%. Its closest competitor, he said, is a trust for Garrett’s children, which holds 38%.

According to the proxy statement, Brown’s group has secured $2.5 million in financing from “a major bank” and has been advised that additional funds are available.

Last November, groups headed by Brown and Garrett jointly converted the company to public ownership. On Feb. 10, Stater suspended Brown and alleged in a suit filed in Los Angeles County Superior Court that Brown was responsible for accounting procedures that improperly understated the company’s earnings.

The suit claims that Brown’s intent was to reduce the initial price of the company’s stock, allowing him to buy large numbers of shares at depressed prices. This was in violation of federal securities law, the suit further alleges. On Friday, Stater filed a similar suit in U.S. District Court in Los Angeles.

Brown has denied the allegations.