Gradco Systems Delays Meeting of Shareholders
Gradco Systems Inc., a maker of copier and printer products, postponed its annual shareholders meeting Friday and said it will fight an attempt by a tiny New York publisher to seek representation on the Irvine firm’s board of directors.
New York-based Plenum Publishing Corp., which owns 8.9% of Gradco, said in a filing last week that it plans to nominate at least one outside director to Gradco’s board. Gradco currently has no outside directors.
Plenum Chairman Martin E. Tash filed a civil lawsuit on Aug. 24 against Keith B. Stewart, Gradco’s chairman, and the company’s directors for allegedly granting themselves warrants to buy a 17% stake in the company’s valuable new Japanese subsidiary at below-market prices.
“We will solicit proxies to replace the board of directors of Gradco,” said Bernard Bressler, Plenum’s corporate counsel and secretary. He said, however, that the New York firm has no plans to acquire a controlling interest in Gradco.
Gradco said it would seek to nominate its own outside director at the annual meeting, which was abruptly rescheduled for Oct. 12.
In its suit filed in Orange County Superior Court in Santa Ana, Plenum alleges that Stewart and company directors conspired to misappropriate for their own benefit one of the company’s most valuable assets--its Japanese subsidiary, worth an estimated $100 million.
A Gradco spokesman declined to comment on the suit.
Besides Stewart, the suit names Gradco officers Joseph Sanchez, president and chief operating officer, and Mark M. Takeuchi, president and chief executive of Gradco Japan. It also names two company directors, Thomas J. O’Keefe and Horst O. Sieben.
The suit alleges that the scheme arose from Gradco’s reorganization this spring, in which it divided itself into two operating subsidiaries, Gradco Printer Systems Inc., a money-losing printer products unit, and Gradco Japan Ltd., which consisted of the company’s lucrative copier products sales and was 96%-owned by the parent company.
As part of the restructuring, Gradco discontinued manufacturing in Santa Ana and shifted its production to Japan and South Korea.
