Fit to be fried

Idaho's potato king accuses a dead Dallas oilman and his sons of a multimillion-dollar scam

Although the jury's verdict is still on appeal, J.R. Simplot has not flagged in his efforts to exact his due. In addition to the latest lawsuit, Simplot also is continuing his efforts to simply buy the company outright.

As late as last week, Simplot was offering to buy up shares of Box Energy for between $11 and $14 a share, but only if he could purchase a majority of the company. Since Box Brothers Holding Company owns 57 percent of Box Energy, Simplot's offer is only good if the brothers agree to sell some of their stake.

But the offer, and protracted litigation, has opened a breach within the Box brothers that is prompting a whole new spate of lawsuits.

The four Box sons tend toward the tall side, like their father. The three youngest--Gary, Doug, and Tom--are lean and hale. Don, the oldest son, looks it.

After Cloyce Box died, the brothers had to sort out the various family businesses and protect their father's estate from numerous creditors, including Simplot.

Each son holds an equal share of Box Brothers Holding Company, which in turn owns the majority of Box Energy. But only one son, youngster Tom, effectively ended up with any real heft in the family business.

Under an arrangement now at the heart of two new lawsuits, Tom Box owns the only share of Box Brothers Holding Company that comes with a vote. Brothers Don, Gary, and Doug have no real say in how the holding company is run.

Gary Box says the other brothers deferred to Tom after their father's death because "Tommy was the family lawyer, and still is the family lawyer. He was my father's right-hand man the last five years of his life."

The arrangement wasn't a problem--until the brothers began disagreeing about the best way to deal with J.R. Simplot's continuing efforts to buy Box Energy.

Doug Box thinks selling to Simplot would be the easiest way out of their legal wrangles, and that each brother could make some money off the deal. Gary Box thinks Simplot's offer is at least worth considering.

Don Box has been silent on the issues. But Tom Box, the one brother who actually holds a vote, is steadfastly opposed.

In April, the brotherly disagreement erupted into a feud of its own. Don, Doug, and Gary, acting as the board of directors of the holding company, called a meeting and awarded themselves voting shares in the company.

Tom Box vigorously objected, and responded by firing Doug from the board of directors.

Tom Box also filed suit in Delaware, asking a court to validate his control of the holding company. Doug and Gary Box, along with their uncle Boyce Box and two cousins, filed their own suit in Dallas County District Court. The suit asks the court to validate their voting rights in the holding company.

The latest legal salvos made for lively discussion when the Box Energy shareholders held their annual meeting in a ballroom at the Grand Kempinski Hotel last Thursday.

Several dozen stockholders arrived for the show, during which Tom Box and Don Box sat at the dais, while Doug Box and Gary Box sat in the audience.

"We're talking, but we're not real happy with each other," Gary Box said after the meeting.

Just minutes into the agenda, the meeting's very legality was challenged by Allen Mann, an attorney representing a small group of Box Energy shareholders.

Mann questioned the presence of a required quorum since it was unclear who among the Box brothers had the power to vote the family's majority share. William J. Burnett, the company lawyer, fumbled his way through a series of vague explanations, the upshot being that the meeting would go forward.

The company's board of directors--sanctioned by Tom Box's majority vote--was elected, and Tom Box and other officials proceeded with a slide show extolling the company's success. The unmistakable undercurrent of the official presentations was that Box Energy can make a lot of money if it doesn't cave in to Simplot.

But the Box stockholders were clearly an unhappy bunch. Some raised questions of who was "bilking" whom, and one shareholder asked why Tom Box gets to be the "dictator" of Box Energy.

One after another, shareholders asked why the Boxes are suing each other--and why the company shouldn't be sold to Simplot if it will fetch a good enough price.

Although they kept control of the annual meeting, it was clear afterward that the Box brothers--particularly Tom Box--are sitting atop a volcano of seething stockholders.

"We feel the conduct in this meeting is just another example of the inconsideration shown to the stockholders of the company," attorney Mann said after the meeting. "We're concerned about the company being managed properly for the interests of all stockholders, not just the interests of Tom Box."

Ron Bensh, an affable man recently installed as Box Energy's director of investor relations, found himself fielding a slew of hostile questions after the meeting. Characterizing the continuing litigation spree as an "inconvenience," Bensh maintains the company is still vibrant and profitable. "We have excellent cash flow and an excellent balance sheet," he says.

« Previous Page
Next Page »
My Voice Nation Help