Activist investor Third Point sued Campbell Soup on Thursday, alleging the soup and snack maker's board misled investors about the competence of its directors and the way it carried out a recently completed strategic review.
The lawsuit is the latest move in a bitter proxy contest in which billionaire investor Dan Loeb and his Third Point hedge fund wants to replace Campbell's 12-member board so it can appoint its own directors and try to revitalize the company's growth.
In a lawsuit filed in state superior court in Camden, New Jersey, which is Campbell's home town, Third Point said Campbell and its board "breached their fiduciary duties to Campbell's stockholders by withholding material information critical to stockholders assessing how to vote at the company's annual meeting."
It asked the court to prevent Campbell from holding its annual meeting on Nov. 29 until the board corrects what Third Point called its misstatements.
Three heirs of condensed soup inventor John Dorrance, who ran the company a century ago, sit on the board and are seeking re-election. Together they control 37 percent of Campbell's stock. Third Point has asked the court to postpone shareholders' votes on the board until the company corrects what Third Point described as misinformation by the board.
The lawsuit says the company failed to disclose critical information about its directors, including Dorrance's grandchild Bennett Dorrance. It accused the company of not making adequately clear what Dorrance's business ventures and investments were, among other things.
Dorrance did not immediately respond to a telephone message seeking comment.
Earlier on Thursday, Campbell's board chairman wrote a letter to investors saying that Third Point's proposed directors were not qualified to oversee the company and that Third Point had not presented any new ideas or specific strategic plan.
"Third Point has, at best, a superficial understanding of the food industry and the company, as evidenced by its non-substantive plan filled with platitudes and business school buzzwords," the letter to shareholders said.
Such lawsuits are not uncommon in proxy battles as both sides seek every advantage. Third Point said in the suit that it needs the court's help to wage a "meaningful proxy contest" and for investors to make fully informed decisions.
Third Point says in its lawsuit that shareholders do not have enough information to assess the company's strategic plans, which includes selling some divisions and finding a permanent chief executive to replace Denise Morrison who left in May.
"Without further information about its strategic plan that the board has withheld, and that is unknowable to stockholders without further disclosure, the Nov. 29 director election will be a sham," the lawsuit said.
Third Point also said that investors are in the dark about the new CEO selection process.