Make us your home page

Small Florida town seeks to wrestle away voting rights for some Publix stock

Why does a flyspeck of a town in North Florida want voting rights to a potentially massive block of Publix Super Market's stock?

Maybe it's tied to a recent campaign to oust the chain's directors at the upcoming annual meeting and take the company public.

Or maybe the people of Campbellton, just south of the Alabama line in Jackson County, just want to lobby for a Publix in their town, population 351.

It's tough to tell because none of the town officials are talking about their effort to seize voting rights in Publix stock by eminent domain, a move one veteran securities lawyer described as "totally bizarre."

A Publix spokeswoman declined to comment on the notice, saying it needs to see the court filing, which the town is trying to put under seal.

Casey Bigelow, Campbellton's lawyer, defended the unusual strategy while declining to clarify its purpose.

"It would only benefit Publix employees, let's just leave it like that," he said.

On March 10, Campbellton put a summons in the nearby Graceville News saying it had filed "a complaint of condemnation and declaration of taking." In torturous legal language, the notice says the town is taking the voting rights in Publix stock held by Floridians who own any of hundreds of mutual funds, annuities or insurance policies named in the suit because the people holding these rights are, in most cases, not voting these shares.

Shareholders have the right to vote at annual meetings for policy changes and board members. The more shares you own, the more votes you have. In many cases, small investors do not exercise the right to vote, feeling they will have little impact.

Bigelow could not say how many people are in the category or how many shares they represent. "We requested that information from the mutual funds and annuities but they declined," he said.

Executives and directors of Publix are exempt from the town's effort, the notice says, "because it is considered reasonable … that the directors and executive management of the company routinely vote their voting rights."

Publix's founder, George Jenkins, gave 85 percent of the company's shares to its employee stock ownership plan. His heirs and other insiders control the rest, as well as the company's board. A group of dissident shareholders is proposing to replace those directors with candidates who want to take the company public.

As a privately traded company, Publix uses an independent analyst to set the share price based on its financial performance and the share prices of publicly traded supermarket chains. When employees want to sell their stock, they generally sell them back to the company.

But over the years, Publix shares have found their way into mutual funds and other outsiders' hands through "gray market" transactions.

"There are a battery of venture capitalists who watch the marketplace and make it known to employees by word-of-mouth that they are interested in taking Publix shares off their hands through private offering exemptions," said Jack Kiefner, a St. Petersburg lawyer who specializes in securities law. "They accumulate the shares and make them available in blocks to the funds."

Kiefner said it is impossible to guess how many Publix shares are held in the funds named in the Campbellton lawsuit. But he was skeptical of the town's assumption that individual investors have the right to vote shares held in a fund's portfolio.

"Those shares are held by the mutual fund or annuity, they're not in the individual investor's name," said Kiefner, a former SEC lawyer. "Investors don't have legal ownership of specific shares. The legal title holding is in the fund."

In other words, Campbellton's argument that it can take away a mutual fund investor's right to vote a company's stock is flawed because those investors don't have those rights to begin with.

Saying he can't imagine how the Campbellton's claim could be enforced, Kiefner said, "It's patently absurd. In my 39 years as a securities lawyer, I've never seen anything quite like this."

Campbellton's lawyer, who was admitted to the Florida Bar in October, said the town has its own investment experts who disagree with Kiefner's assessment.

"It might be something that's not done a lot," he said. "But Campbellton is entitled to zealous representation."

The town is giving Publix shareholders until the end of the month to respond to its demand. Otherwise Campbellton will allegedly have the right to vote those shares at the upcoming Publix annual meeting on April 12.

Times staff writer Mark Albright contributed to this report. Kris Hundley can be reached at [email protected] or (727)892-2996.

To see Campbellton's legal notice, go to and search for Graceville News for 3/10/11 date. Look for SUMMONS PERSONAL SERVICE BY PUBLICATION

Small Florida town seeks to wrestle away voting rights for some Publix stock 03/18/11 [Last modified: Monday, March 21, 2011 11:39am]
Photo reprints | Article reprints

© 2017 Tampa Bay Times


Join the discussion: Click to view comments, add yours

  1. Carrollwood fitness center employs scientific protocol to help clients


    In 2005, Al Roach and Virginia Phillips, husband and wife, opened 20 Minutes to Fitness in Lakewood Ranch, and last month they opened the doors to their new location in Carrollwood.

    Preston Fisher, a personal fitness coach at 20 Minutes To Fitness, stands with an iPad while general manager/owner Angela Begin conducts an equipment demonstration. The iPad is used to track each client's information and progress. I also included one shot of just the equipment. The center recently opened in Carrollwood. Photo by Danielle Hauser.
  2. Olive Tree branches out to Wesley Chapel


    WESLEY CHAPEL — When it came time to open a second location of The Olive Tree, owners John and Donna Woelfel, decided that Wesley Chapel was the perfect place.

    The Olive Tree expands its offerings of "ultra premium?€ extra virgin olive oils (EVOO) to a second location in Wesley Chapel. Photo by Danielle Hauser.
  3. Massachusetts firm buys Tampa's Element apartment tower

    Real Estate

    TAMPA — Downtown Tampa's Element apartment tower sold this week to a Massachusetts-based real estate investment company that plans to upgrade the skyscraper's amenities and operate it long-term as a rental community.

    The Element apartment high-rise at 808 N Franklin St. in downtown Tampa has been sold to a Northland Investment Corp., a Massachusetts-based real estate investment company. JIM DAMASKE  |  Times
  4. New York town approves Legoland proposal


    GOSHEN, N.Y. — New York is one step closer to a Lego dreamland. Goshen, a small town about fifty miles northwest of the Big Apple, has approved the site plan for a $500 million Legoland amusement park.

    A small New York town, Goshen approved the site plan for a $500 million Legoland amusement park. Legoland Florida is in Winter Haven. [Times file  photo]
  5. Jordan Park to get $20 million makeover and new senior housing

    Real Estate


    Times Staff Writer

    ST. PETERSBURG —The St. Petersburg Housing Authority, which bought back the troubled Jordan Park public housing complex this year, plans to spend about $20 million to improve the 237-unit property and construct a new three-story building for …

    Jordan Park, the historic public housing complex, is back in the hands of the St. Petersburg Housing Authority. The agency is working to improve the 237-unit complex. But the latest plan to build a new three-story building for seniors will mean 31 families have to find new homes. [LARA CERRI   |   Tampa Bay Times]