Heidelberg Distributing Company by the numbers
• 1,600 employees
• 18,000 beverages
• 740 suppliers
• 2 million square feet of warehouse space
• 300,000 square feet of cooler space
• Serves 26,000 bars, restaurants, retail stores and other businesses throughout Ohio and northern Kentucky
Source: HeidelbergDistributing.com
A Hamilton County judge took the unusual step of writing a letter to the attorneys representing both sides of a bitter family feud over control of Moraine-based Heidelberg Distributing Co., cajoling them to work out their differences outside the courtroom.
It didn’t work. Three weeks after sending the letter, the judge issued a ruling that was promptly appealed by the family most involved in the day-to-day operations of Heidelberg. That means ownership and control over one of the largest beer distributorships in the country and a significant source of philanthropy in Dayton and southwest Ohio remain unresolved after more than a year of legal wrangling and personal attacks.
“This is a dispute between good people who together have inherited and then further built an enormously successful business,” Hamilton County Common Pleas Judge Steven E. Martin wrote to attorneys representing both sides in the lawsuit. “I encourage the parties to continue to discuss settlement. The time you spend in court is time not spent managing the business.
“You are all very fortunate people to have a business the success of which is defined in part by people drinking alcoholic beverages, which has been going on for thousands of years. I encourage you to resolve your differences and take advantage of the unique franchise that has been bequeathed to you.”
Dayton-based Heidelberg, which traces its roots to 1938, is one of the largest companies of its kind in the Midwest. Beverage Executive magazine ranked Heidelberg the nation’s 14th largest beer distributor by volume four years ago, boosted in part by its deliveries of Anheuser-Busch InBev products (including Budweiser beers) in Dayton and Cincinnati. It also distributes a wide variety of wine and spirits to restaurants, bars, grocery stores and other retailers throughout Ohio and northern Kentucky.
The company operates nine warehouse and office facilities in Moraine, Cincinnati, Cleveland, Columbus, Lorain, Toledo, Youngstown and northern Kentucky. In all, Heidelberg employs more than 1,600 and serves more than 26,000 retail accounts.
Heidelberg spent $20 million to renovate the former Cooper Tire & Rubber Co. warehouse on Dryden Road along Interstate 75 in Moraine before moving its Dayton-area operations into that facility in 2013. The facility employs more than 300.
Heidelberg has supported local non-profit organizations that include Big Brothers and Big Sisters of the Greater Miami Valley, Dayton Visual Arts Center, Culture Works, the American Heart Association, Dayton Philharmonic Orchestra, Dayton History and The Pink Ribbon Girls. And the beverage distributor has co-sponsored the Fleurs et Vin (formerly Fleurs de Fete) charity fund-raising event every year since its inception 25 years ago.
The lawsuit began more than a year ago, on Dec. 5, 2014, when Albert Vontz III, president and co-chairman of Heidelberg Distributing, sued his sister, Carol Miller, and several of her family members whom Vontz claimed have “seized control” of the company and were “oppressing the third and fourth generations” of his own family. The lawsuit alleged that the Miller family paid themselves exorbitant salaries, engaged in wasteful spending and misappropriated company assets.
Vontz and Miller are the grandchildren of Heidelberg’s founder, Albert W. Vontz, who came to Cincinnati in 1907 as a 22-year-old German immigrant.
In their sharp-edged legal response to the lawsuit, the Millers claimed Albert Vontz III “has never held a meaningful working position” with Heidelberg and “slept through or played video games on his iPad” while attending company board meetings. Vontz “is compensated at an approximate multiple of eight to 15 times higher” than the company’s CEO “for significantly less contribution to the business,” the Millers said.
On Nov. 20 — three weeks after sending the letter urging both sides to negotiate a settlement — Judge Martin filed a decision in the case that stopped short of dictating all the terms of a resolution, and instead ordered both sides to sit down for a full shareholders’ meeting before the end of 2015. But the family members currently operating Heidelberg submitted a notice of appeal with the Ohio 1st District Court of Appeals on the very same day the judge’s decision was filed, and both sides resumed legal squabbling over, among other things, whether one side would have to post a $2 million bond during the appeal.
The judge issued a ruling Dec. 14 that blocks Heidelberg’s current management from “taking any significant actions with respect to the company’s business affairs,” including action on salaries or bonuses, without Vontz’s consent while the appeal is going on. Martin defined “significant corporate action” as decisions with a value of at least $1 million. And he blocked any year-end performance bonuses from being paid to any member of the Vontz or Miller family unless mutually agreed upon.
Miller’s family has been involved in the day-to-day operations of the beer and wine distributor. Vail Miller Sr. led the company for more than 40 years and serves as co-chairman, and Vail Miller Jr. is currently serving as CEO — although Vontz claimed in the lawsuit that his nephew improperly assumed the CEO title.
The lawsuit followed more than a year of unsuccessful negotiations of a possible buyout by the Miller family of Vontz’s ownership stake in the company. In fact, on the very day the lawsuit was filed, the two sides of the family met to consider four potential transactions proposed by Vontz. The Miller family rejected three of the four, refusing “to consider anything but a purchase of Mr. Vontz and his family’s interest at a price far below the fair value,” Vontz claimed in court documents. The civil suit was filed later that day.
An amended lawsuit filed Jan. 20 by Vontz included a list of proposed bonuses for 2014 showing Vontz and Vail Miller Sr. in line for a $1.4 million bonus each, with $200,000 allocated for Vail Miller Jr. and lesser amounts for other Heidelberg managers.
The heated rhetoric between the two sides of the family escalated again in April , with Vontz claiming in a a motion for preliminary injunction that his sister and her family were “using the company’s treasury as their personal piggy-bank by siphoning off funds under the guise of corporate expenditures,” including reimbursements of Miller family country-club fees “believed to exceed $150,000 annually.””
Vontz seeks an unspecified amount in compensatory damages and a permanent injunction that would block Miller family members from seizing unilateral control of Heidelberg’s board of directors. He asked a judge to order his sister to attend a shareholders’ meeting that would allow him to appoint three of the six directors of the company to reflect his 50 percent ownership stake. Vontz said Miller, whose family controls five of the six director positions, has refused to attend multiple meetings that he has called.
In his Nov. 20 decision, Judge Martin mostly sided with Vontz on the legal issues in the lawsuit — but declined to award any monetary damages to him.
“Mr. Vontz is clearly and legitimately concerned about the direction of the company and would like his equal representation on the board,” the judge wrote in his Oct. 30 letter, which later was entered into the court’s docket. “He is concerned that the current board is, without his consent, putting him and the company further in debt. Apart from this, the company owes the plaintiff millions of dollars. He has a legitimate business purpose to his pursuit on his corporate rights.”
In a nod to the personal nature of the lawsuit, the judge wrote, “Perhaps because it is a family dispute — Mrs. Miller is still upset 40 years later over (Vontz’s) tennis playing — it has been hard to resolve. The defendants (the Miller family) have come up with a series of nightmare scenarios and called them ‘legitimate business purposes’ to justify retaining perpetual control over the company.”
The judge ordered both sides to attend a shareholders’ meeting Dec. 14, but that order was set aside because of the Miller family’s notice that they will appeal the judge’s decision and Martin’s ruling that his order will be stayed pending the appeal.
Barring a negotiated settlement, the Miller family’s full appeal is due to the Cincinnati-based appeals court by March 4, and the response by Vontz is due by April 4, a spokeswoman for the Ohio 1st District Court of Appeals told this news outlet last week.
A message sent to attorneys for Vontz seeking comment for this story was no returned by deadline.
Heidelberg CEO Vail Miller Jr. said in a statement, “We have appealed Judge Martin’s order and a stay is in place. We look forward to a decision of that court on the novel issues that this case presents.
“Our company mission at Heidelberg is ‘Life roars through us.’ Therefore, our business continues to thrive thanks to a strong leadership team, loyal customers, retailers and 1,600 dedicated associates.”
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