Kaiser Appeals Shareholder Suit

Kaiser Aluminum Corp., Spokane’s largest manufacturing employer, Thursday said it has appealed a shareholder lawsuit to the Delaware Supreme Court.

The action frees Kaiser to proceed May 1 with the count of shareholders’ ballots on a controversial plan to create two classes of common stock.

However, an earlier injunction by the Delaware Chancery Court bars Kaiser from implementing the plan until the state’s high court rules on whether the proposal reduces voting control of certain shareholders to the benefit of Kaiser’s major investor, Charles Hurwitz and Maxxam Inc.

Kaiser employs 2,600 people in Spokane County at its Trentwood rolling mill and Mead smelter.

The Houston-based company proposed the two-tiered stock plan this year as a way to raise money for future acquisitions and expansion. It would allow the aluminum maker to sell as much as 250 million shares of common stock, up from 71 million currently outstanding.

But investors who own 8 million shares of Kaiser’s preferred stock claim the plan would transfer their voting power to Hurwitz. Hurwitz’ Maxxam, a Houston-based real estate, timber and aluminum concern, currently owns 62 percent of Kaiser.

“Shareholders are not getting what they were promised,” said a shareholders’ representative who asked not to be identified. “They’re getting a two-headed monster.”

Under Kaiser’s plan, one-third of all common shares would be granted one vote each; the restwould get one vote for 10 shares.

Preferred shareholders claim the plan violates a promise that their shares eventually would be converted into common stock worth nearly one vote apiece. They complain that it lets Hurwitz sell his stock while losing little voting control.

Scott Lamb, Kaiser’s director of investor relations, says the two-tiered stock plan would not increase Hurwitz’ stake in Kaiser. It would merely allow all investors to sell lower-voting shares without sacrificing their current voting control.

, DataTimes