Fieldale Farms officials are asking a judge to dismiss a lawsuit brought by one of its largest shareholders, saying her claims are moot after she was voted off the board of directors.
Betty Hatfield Goldberg of Gainesville, daughter of the late Fieldale co-founder Joe S. Hatfield, filed suit against the Baldwin-based poultry giant, claiming she was denied access to company records after she wanted to take a more active role in the company.
Goldberg owns 18 percent of the company’s privately held shares, according to court documents. Only her brother, Joe M. Hatfield, and Gus Arrendale, son of the late Fieldale co-founder Tom Arrendale, own more interest in the company, according to court documents.
Cyndae Arrendale, Tom Arrendale’s daughter, also owns 18 percent of the shares, according to court documents.
As one of the largest independent poultry processors in the world, Fieldale’s annual sales have been estimated by various business publications as being in excess of $450 million.
Documents filed this month in Habersham County Superior Court show that after Goldberg filed her suit in February, the company’s eight other shareholders met in March to vote on removing her from the board. Goldberg did not attend the meeting but sent a letter, which was read to the board.
“After my father’s death (in 2008), I raised many issues to the board and (Fieldale President) Tom Hensley that concerned me,” Goldberg wrote. “What I had hoped would be beneficial dialogue about the company, quickly spiraled into an unfortunate situation where I was isolated and criticized.”
At the meeting, shareholder William House made the motion to remove Goldberg from the board and it was seconded by Howard Watkins. The remaining six shareholders present, including Goldberg’s brother, voted in favor of her removal.
Fieldale now argues in court filings that Goldberg has no legal standing to sue for access to the company’s records because she is no longer a member of the board of directors.
“The requested declaratory relief was rendered moot when Fieldale shareholders voted to remove plaintiff as a director of the company,” attorney Jay Bennett wrote for Fieldale. “Moreover, directors are not authorized to inspect corporate documents, much less given an unlimited inspection right.”
Fieldale has cited a Georgia law that allows shareholders to inspect “certain limited categories of documents, but does not grant such a right to directors.”
The company claims Goldberg has “regularly reviewed documents as a shareholder.”
Goldberg’s attorney, Ernest “Bucky” Woods, wrote that “Fieldale’s argument lacks merit and such gamesmanship should be condemned.”
“As a result of Fieldale removing Goldberg from its board of directors and as a result of a thorough investigation into Fieldale’s conduct, it has become clear that Fieldale and (its board members) have breached and continue to breach fiduciary duties owed directly to Goldberg,” Woods wrote.
Fieldale has asked for a court hearing to argue its motion to dismiss the case.
Mountain Judicial Circuit Judge Rusty Smith ordered that mediation between the parties take place, preferably in July. It was unclear through court filings if a mediation session was held.
Woods, Goldberg’s attorney, declined to comment when reached Friday. Fieldale’s attorney did not return a phone message.