| MINEOLA, New York
MINEOLA, New York May 28 A lawyer for an
estranged co-owner of AriZona iced tea seeking to sell his stake
in the company behind the popular brand urged a judge to value
the beverage maker at $4 billion, an amount that the other
co-owner disputed as far too high.
Nicholas Gravante, an attorney for John Ferolito, said on
Wednesday that a judge in Mineola, New York, should use past
offers for the beverage company when deciding how much
Ferolito's former business partner, Domenick Vultaggio, and
Beverage Marketing USA Inc, must pay to buy out the 50 percent
stake held by Ferolito's family.
Offers from Tata Global Beverages Ltd, Nestlé SA
, Coca-Cola Co and others have pegged the
company's worth at as much as $4.5 billion, he said during
opening arguments of the valuation trial.
"The fair value is equal to what a willing purchaser would
pay for AriZona," Gravante said.
But Louis Solomon, a lawyer for Vultaggio, countered the
company was worth just $426 million, saying the offers weren't
binding and the billion dollar ranges were "fantasy."
"They are worth nothing," he said. "Zero."
He also argued the judge should subtract $249 million from
whatever is awarded to Ferolito and a trust for his son because
of conduct that hurt the beverage maker.
Privately held Beverage Marketing and its related companies
have 1,000 employees and annual sales of $1 billion, Solomon has
The non-jury trial, before state Supreme Court Justice
Timothy Driscoll, follows six years of litigation between
Ferolito and Vultaggio, both of whom launched AriZona in
The men later agreed to restrict the transfer of company
stock to outsiders. But by 2005, Ferolito wanted to sell his
shares and began pushing for a corporate sale.
Unable to gain Vultaggio's support, Ferolito went to court
seeking a ruling that restrictions on his ability to sell were
After courts ruled against him, Ferolito filed a lawsuit
seeking to dissolve Beverage Marketing. Vulaggio later elected
under state law to buy out his partner.
Subsequent court rulings said Beverage Marketing itself
could buy Ferolito's stake. The trial now covers all AriZona
Solomon has insisted that valuing the beverage maker at too
high a price could result in insolvency. At trial, he urged
Driscoll to ensure AriZona remains viable, saying Ferolito
"wants to kill the company."
While Ferolito's lawyers says the company's revenue is
increasing, Solomon said it is facing declining margins as its
business has matured.
"Even if they were going gangbusters, the company is not
worth $4 billion," he said.
But Gravante said experts hired by Ferolito valued the
company at $3 billion. Tata and Nestle meanwhile are still
interested in buying the AriZona companies, he said.
"We already know in this case what a willing purchaser would
pay," he said.
Representatives for Tata and Nestle did not respond to
requests for comment.
The case is Ferolito v. AriZona Beverages USA LLC, et al,
New York Supreme Court, Nassau County, No. 004058-12.
(Reporting by Nate Raymond in New York; Editing by Steve