Lund Sibling Sues for Stake in Chain
While facing new competition in recent years, Lunds & Byerlys remains a beloved company among grocery shoppers in the Minneapolis-St. Paul area.
But a lawsuit filed by one of the four Lund siblings looking to cash out her stake in the company potentially threatens the retailer’s future.
Kim Lund, the oldest of two sisters and two brothers who own the company, wants to sell her share, but the $21 million offered to her is a fraction of the more than $80 million she’s seeking, the Minneapolis Star Tribune reported.
Attorneys for Kim Lund contend that the company’s offer “lacks credibility,” while lawyers for Lunds dispute her valuation, arguing that the company would have to borrow heavily to pay for it, the Star Tribune reported.
The lawsuit, filed against Lunds Inc. and Kim Lund’s brother, company CEO Russell “Tres” Lund, went to trial this week.
While the company currently is debt-free, its attorneys argue that it would have to take on a “crippling” amount of debt to pay what Kim Lund demands, which would seriously weaken the company at a time when competition is heating up in the local market from players like Hy-Vee, Fresh Thyme Farmers Market and Trader Joe’s, the Star Tribune reported.
Kim Lund’s attorneys have proposed other ways to finance a buyout of her company stake, including sales to a non-family buyer or a partial stock offering. She further charged in court papers that Tres Lund has intentionally depressed the value of the company to avoid paying the full value of her shares, the Star Tribune reported.
Lund Inc.’s net sales grew from $514.8 million in 2011 to $659.6 million in 2015, according to court papers; its net income peaked at $19.9 million in 2013, then fell to $11.4 million in 2015.
A Lunds spokesperson declined PG's request for comment on the case.