A 17-year employee and shareholder has filed suit against Federated Department Stores Inc., to block plans to liquidate its Fingerhut subsidiary.
The employee, Nick Wesenberg, claimed in the lawsuit that Federated and its executives failed to make a good faith effort to sell the catalog business as a whole company, according to a news report. The suit also accuses the firm of breaching its fiduciary duty to stockholders saying Fingerhut is more valuable intact.
Wesenberg works at the St. Cloud warehouse and owns 200 shares of Federated stock. Since the announcement of the closing of Fingerhut, his hours and pay have been cut, the report said.
The lawsuit was filed in Hennepin County District Court in Minneapolis, MN.
The company announced Jan. 16 that it would “dispose” of its Fingerhut subsidiary.
It said it would close the 54-year-old catalog firm, lay off the employees and sell whatever assets it could including a 4.1-million-name customer database.
The firm said from the start that a buyer wasn’t likely.
More than a dozen potential buyers have emerged and one bid had been taken last week. (DIRECT Newsline, Feb. 13).
Fingerhut employs about 6,000 people at its Minnetonka, MN headquarters and at facilities in St Cloud and Tennessee. Layoff notices have already been sent to about 70% of the employees.
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