CINCINNATI -- An appeals court upheld an injunction in a bitter public fight between brother and sister co-owners in one of the largest beer distributorships in the Midwest.
The Ohio First District Court of Appeals' Dec. 30 decision marks the latest twist in the family feud at Heidelberg Distributing Company.
Albert Vontz III sued his sister, Carol Miller, in December 2014, claiming her side of the family had taken control of the company. Despite attempts to settle the case, the two sides could never agree and it ended up in court.
The trial in September 2015 offered a rare glimpse into a large family business that was fraying after 77 years. It also showed what could happen when two siblings each own 50 percent of a company’s voting stock, and they can’t agree.
“This is a dispute between good people who together have inherited and then further built up an enormously successful business. Perhaps because it is a family dispute … it has been hard to resolve,” Hamilton County Court of Common Pleas Judge Steven Martin wrote in a five-page decision that resoundingly sided with Vontz.
Afterward Miller and her family, who all have leadership positions in the company, appealed the ruling.
More than a year later, the appeals court upheld the most important part of Miller’s ruling – an injunction that would give Vontz a bigger decision-making role at Heidelberg.
“We hold that the record amply supports the trial court’s conclusion that Miller had caused irreparable harm to Vontz by suppressing his voting rights, and that injunctive relief was warranted to prevent further oppression,” Judge Penelope Cunningham wrote in the unanimous ruling.
The appeals court ruled that Miller did, in fact, manipulate company regulations in order to suppress her brother’s voting rights. But it also ruled that Martin must make some changes to his injunction.
Martin had ordered Miller to attend an annual shareholder’s meeting -- which she long avoided to keep her side of the family in power -- or possibly be held in contempt of court.
But the appeals court overruled this, saying that Miller cannot be forced to attend a shareholder’s meeting.
Instead the appeals court ordered Martin to change the wording in his injunction so that when a meeting for the election of board directors is called, “either by the board or by Vontz – the shareholders attending the meeting … shall constitute a quorum for the purpose of electing directors,” the appeals court wrote.
This means that if Miller chooses not to attend a meeting, then Vontz, as the only other shareholder, could still vote.
Vontz had long argued for more seats on the board of directors. He has one seat, and the other five are occupied by his sister’s side of the family: Carol Miller; her husband Vail Miller Sr., who is co-chairman of Heidelberg, and their children, Brook Miller Hice, who is the chief legal officer, Vail Miller Jr., who is CEO, and Michael Miller who is vice president of sales and marketing.
What will happen to Heidelberg?
What happens at the next shareholder’s meeting could affect the company’s 1,600 employees.
By all accounts, Heidelberg is a successful company and the nation’s 14th largest distributor of beer, wine and spirits. Its annual sales climbed to $661 million in 2013, according to court documents.
Heidelberg serves 26,000 retailers in Ohio and Kentucky, and has nine warehouses and offices. But it had a humble beginning.
It began as “one man, one truck,” when Albert Vontz, a young German immigrant, drove 60 miles each day from Covington to Dayton, Ohio to sell beer to retailers after the Prohibition ended and breweries began to sell beer beyond their neighborhoods.
His son, Albert Vontz II, expanded the company, acquiring the rights to distribute Anheauser-Busch products in 1959 and 1960.
The Vontz name is recognized throughout Cincinnati. He donated $5 million to the UC Medical Center for a neuroscience and cancer research facility. The Vontz Center of Molecular Studies opened in 1999. He donated a 26-foot high electronic robot sculpture — called Metrobot — to the Cincinnati Contemporary Arts Center. The Vontz Theatre of Cincinnati's Playhouse in the Park is named after the Vontz Sr.
Vontz was the sole leader of Heidelberg, and when he died in 2002, he left his voting shares to his two children, Vontz III and Miller.
The siblings began fighting in late 2010, soon after their mother, Esther Vontz, died.
Vontz, who had loaned $17 million to the company, had concerns about the increased debt level and the Miller family’s use of corporate assets and positions.
At that point, three of the Millers' children, who were older, had already been appointed to the board of directors. But Vontz’s son, Albert Vontz VI, was too young to be “ceremonially appointed,” as was the family custom at age 18, he testified.
“My son wasn’t so visibly involved and I said, ‘Hey, we’ve got to get this thing straightened out,” Vontz testified at trial.
What happens next?
The appeals court remanded the case to Martin to make the changes to his injunction.
Another hearing in Common Pleas court is likely.
The appeals court also ruled that Martin erred in determining that Hice, as general counsel, had breached her fiduciary duty to Vontz. The court ruled that she had not.