Stater Bros. Bank Account Frozen : Reactivated After Court Agreement by Feuding Parties

A long-fought and personal battle for control of a suburban supermarket chain got so confusing Tuesday that a bank temporarily froze one of its checking accounts.

Confusion over who is in charge at Stater Bros.--current management or ousted President Jack H. Brown--prompted Security Pacific National Bank to freeze briefly the company’s account at its Colton branch.

But later in the day, a Stater spokesman said the checking account had been reactivated. He said Stater payroll checks, drawn on the Security Pacific account, will be issued as scheduled Thursday.

“The employees have been told that it will have no affect on paying customers or employees,” Bernard R. Garrett, chairman of Stater, said in a telephone interview. Brown could not be reached for comment.

The company said all banking relationships are proceeding as normal. Stater’s other bank accounts, including its general corporate fund at Union Bank, were not affected by Security’s action, company officials said. Security Pacific declined comment on Stater, saying it was a confidential client matter.

Both Garrett and Brown, who was suspended as president and chief executive of Stater in February, claim to be Stater’s chairman. Brown was ousted amid allegations of fraud and securities violations, which he has denied.

Garrett and Brown have been feuding ever since. Last month, at Stater Bros.’ annual meeting, shareholders voted for a slate of three nominees supported by Brown. That vote is being contested by Garrett as part of a lawsuit filed in Delaware.

Meanwhile, Brown, claiming that he has a 5-4 voting advantage on the board, held a board meeting Friday at which, he says, he was reinstated as president and chief executive and elected chairman.

It was after that meeting that Brown sent a letter to Security Pacific about the executive changes and sought authority for Brown and other executives to sign company checks.

“Brown added confusion by sending his letter to the bank,” a Stater spokesman said.

The freeze was lifted because of an agreement reached by both parties Tuesday in a Delaware court, according to the Stater spokesman.