NEW YORK, April 15 – LAWFUEL – The Law News Network – Allegations that Ronson Corporation (Nasdaq: RONC) CEO and president, Louis V. Aronson II, and
10 company insiders violated federal securities law and the rights of the
Company’s other shareholders by agreeing to improperly acquire stock to secure
voting control over a majority of the Company’s outstanding shares for Mr.
Aronson were made in a lawsuit filed today by Ronson’s largest independent
shareholder, Steel Partners II, L.P. (“Steel Partners”).
The lawsuit, which in addition to Mr. Aronson names eight Ronson
directors, its CFO and a paid consultant to the Company, alleges that Mr.
Aronson and his group failed to file with the SEC a Schedule 13D, and violated
the New Jersey Shareholder Protection Act. The lawsuit, which alleges that
Mr. Aronson formed the group specifically to gain control of a majority of the
Company’s shares, also alleges that the conduct of Mr. Aronson’s group
triggered the provisions of Ronson’s Shareholder Rights Agreement.
The lawsuit was filed in the United States District Court for the District
of New Jersey. It seeks to force Mr. Aronson and the other defendants to file
reports mandated by the Securities and Exchange Commission, and to enforce the
Company’s Shareholder Rights Agreement.
“We intend to seek court authorization for shareholders to exercise their
rights to immediately purchase new shares of stock directly from Ronson
Corporation,” said Steel Partners managing partner Warren Lichtenstein. “We
will not sit idle and allow Mr. Aronson to surreptitiously and illegally use a
group of hand-picked directors, officers and consultants to gain control of a
majority of the Company’s shares (without paying a control premium to all the
other shareholders.) Mr. Aronson should not be allowed to continue his scheme
to enrich himself and his cronies at the expense of Ronson’s other
shareholders.”
Mr. Lichtenstein continued, “These actions by Mr. Aronson and his paid
loyalists are yet another example of their pattern of manipulating Ronson’s
corporate machinery by continuing to ignore proper corporate governance and
this nation’s securities laws.”
According to the lawsuit, Mr. Aronson’s group achieved its goal of placing
majority voting control into Mr. Aronson’s hands as of March 23, 2005. The
lawsuit alleges that the members of Mr. Aronson’s group also agreed to vote
their shares in the Company as directed by Mr. Aronson.
The lawsuit also notes that Mr. Aronson received compensation of nearly
three times the net earnings Ronson reported from 1998 to 2004. Ronson
reported total net earnings of about $1.6 million during that period. During
that same period, Mr. Aronson received compensation of about $4.5 million.
Mr. Aronson, 81, is the longest serving CEO of any public company in
America. The complaint added that none of the defendant directors has ever
dissented from any proposal made by Mr. Aronson, including periodic renewals
of his employment contract, which the Board last renewed for three years in
late 2004, as Mr. Aronson approached his 82nd birthday.
In addition to Mr. Aronson, also named as defendants in the lawsuit are:
* Robert A. Aronson, a Director and Louis Aronson’s son;
* Carl W. Dinger III, a paid consultant to the Company who also receives
proxy fees for allowing the other defendants to vote his large block
of Ronson’s shares;
* Barbara L. Collins, an antiques dealer who Mr. Aronson selected as a
Director in late 2004;
* Paul H. Einhorn, an 89-year old selected as a Director by Mr. Aronson
in late 2004;
* Erwin M. Ganz, a Director and trustee of Ronson’s retirement plan who
also has a consulting agreement with the Company;
* Daryl K. Holcomb, Ronson’s CFO;
* Leo Motiuk, a Director;
* Gerard J. Quinnan, a Director who has a consulting agreement with the
Company;
* Justin P. Walder, a Director and Assistant Corporation Counsel whose
firm receives legal fees from the Company; and
* Saul H. Weisman, a Director.
The lawsuit seeks, among other things, an order forcing the defendants to
report to the SEC their undisclosed agreements, the purposes of those
agreements and the number of shares they control as a group; a declaration
that the defendants have triggered the Shareholder Rights Agreement; an order
forcing the defendants to perform their obligations under that agreement; and
a declaration that the defendants are subject to restrictions on their
activities imposed by the New Jersey Shareholder Protection Act.
