Judge Postpones Fabulous Inns Shareholder Meeting to Nov. 30

A Superior Court judge on Tuesday postponed Fabulous Inns of America’s shareholders meeting, scheduled for this morning, after management argued that the meeting would violate federal regulations.

San Diego County Superior Court Judge James A. Malkus rescheduled the shareholders meeting for Jan. 30, after Fabulous Inns management argued in court late Tuesday that it could not comply with Securities and Exchange Commission regulations regarding advance notification of the gathering.

Fabulous Inns stockholders have not met as a group to elect directors since mid-1984.

Malkus ordered the meeting three weeks ago after he granted a motion made by dissident shareholder Frank Ferreira, who owns about 30% of Fabulous Inns stock.

Ferreira, a Chula Vista investor, and Fabulous Inns are locked in heated legal battle, with each side charging the other of trying to take over the company. Ferreira was once an ally of Chairman Jeff Krinsk and President David Yardley, and helped them oust a group of former Fabulous Inns executives.

The two sides met Monday in an attempt to settle the litigation out of court but failed to reach a compromise, according to sources familiar with the lawsuits.

Last week, U.S. District Judge Judith N. Keep refused to block the shareholders meeting, ruling that the meeting would not cause irreparable harm to the company.

Management argued that the meeting would violate federal securities regulations and that many shareholders--especially those holding stock in “street name”--wouldn’t be notified of the gathering.

“The shareholders will finally be able to have an informed meeting,” Yardley said Tuesday, “and the electorate can base its judgments on the full hearing of the merits of the respective positions.”

Pete Shenas, Ferreira’s attorney, said he was “disappointed that the meeting will not take place as scheduled.”