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Lawyers Of Former Pillsbury Shareholders To Receive About $4 Million

February 24, 1989

MINNEAPOLIS (AP) _ Grand Metropolitan PLC has agreed to pay about $4 million to lawyers who represented former Pillsbury Co. shareholders in litigation that played a part in Grand Met’s takeover of the food and restaurant company, a lawyer said Thursday.

Shareholders’ lawyers in the Minnesota lawsuit against Pillsbury will receive slightly less than $2 million and shareholders’ lawyers in a similar Delaware lawsuit will receive slightly more than $2 million, said Steve Oestreich, who represented shareholders in the Delaware action.

″They (Grand Met) acknowledged that we played a major role in getting the court″ to agree that Pillsbury’s shareholders’ rights plan, or ″poison pill,″ should be invalidated, Oestreich said.

Johnny Thompson, a spokesman for Pillsbury, said Grand Met had no comment on the terms of the settlement with the attorneys.

Grand Met, a British liquor and specialty products conglomerate, acquired Pillsbury on Dec. 18 for $5.68 billion, or $66 a share. The agreement capped a 2 1/2 -month takeover battle in which Pillsbury resisted the bid by keeping its ″poison pill″ in place and proposing to spin off its Burger King subsidiary.

Two days before the takeover agreement was reached, Justice William Duffy of the Court of Chancery in Wilmington, Del., said he would issue preliminary injunctions sought by Grand Met and the shareholders to invalidate the pill and temporarily block the company’s planned spinoff of Burger King.

Both the pill and spinoff could have made a takeover prohibitively expensive for Grand Met.

Judge Thomas Carey in Minneapolis also sided with the shareholders by agreeing to block the Burger King spinoff, and he said he would agree with Duffy on the ″poison pill″ removal. Oestreich said the court action ″paved the way″ for a takeover.

″I think the shareholders’ rights were well protected,″ said Charles Zimmerman, a Minneapolis lawyer who was part of the Minnesota lawsuit against Pillsbury. ″It (the lawsuit) did a great job for them.″

The lawsuits were filed to encourage Pillsbury to negotiate with Grand Met after Pillsbury initially declined to bargain with the company.

Zimmerman said none of the settlement money will go to shareholders.

If Grand Met had not reached a settlement on fees for the shareholders’ lawyers, it would have been up to Carey and Duffy to award the money, Oestreich said.

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