Two brothers who reorganized Geneva Steel and brought the former USX Corp. plant back into operation are at odds over the management and direction of the company and have begun battling in the courts.
One brother, Christopher B. Cannon, 38, Mapleton, filed a suit against the other, Joseph A. Cannon, 39, Provo, and the company Friday in 4th District Court. Joseph Cannon promises to file an answer to the suit next week.Christopher Cannon says his brother wants to make the family-owned company a public one and sell stock. "I don't think this is the right time to go public. I'm afraid rich Easterners will buy up the stock and dominate the company.
"This company should be locally owned and operated and should reinvest its profits in Utah. I don't want Easterners who are not in tune with Utah to suck the company dry of funds or scrap it the minute Geneva Steel suffers even a small financial downturn."
Jack Bollow, the company's public relations director, told the Deseret News Friday night the day to day management and operation of Geneva Steel and its steel-making facilities will continue under the leadership of Joseph Cannon and "will not be affected during this period of litigation."
He said the company is healthy, employs 2,300 workers, has an annual payroll of $55 million and this year paid a full profit sharing of $10 million.
"Geneva Steel and its chairman and president, Joseph Cannon, have received and reviewed a copy of the complaint," Bollow said. "They will file their responsive pleadings, which will present a remarkably different picture of the facts, sometime next week."
Christopher Cannon said he was fired Nov. 1 as president of the Development Division of Geneva Steel and on Nov. 23 his brother dissolved the division and terminated its eight employees.
Though fired, the younger Cannon was still a member of the board of directors and a major shareholder when the shareholders met Nov. 22. He said the meeting started about 10 a.m. and a motion came before the shareholders to remove the existing board.
"A dispute arose over the voting of the shares in the voting trust which Joseph and I equally control as trustees," Christopher Cannon said.
"The dispute was not settled. Even so, a vote was taken whether to remove the existing directors. I voted against it and my brother Joseph voted in favor of the motion and then Joseph declared that the board had been removed."
Seeing he could have no influence on further action, Christopher left the meeting, he said.
"Afterward, another vote was taken and a new board was seated." Christopher contends the first vote was illegal and the new board improperly seated and cannot act for the corporation.
He said the civil suit seeks to rescind the actions taken at the shareholders' meeting and "is a last resort to put the company back on track to realizing the vision we once shared."
Before being fired, he said, "I had the Development Division successfully on its way to developing the idle facilities such as the plant's Foundry and had attracted support industries such as Pioneer Pipe and Western Coil to Utah County - all of which brought jobs and helped build a stable economic base for the future."
Friends and observers say the two brothers have enjoyed a good working relationship until recently. Christopher said he has taken a back seat to his brother in terms of public appearances and he admits he is practically unknown outside the company. "This is a family company made up of my brother Joseph and me, two other brothers and an uncle. We own about 85 percent of the stock in the voting trust."
He said his brother's attorneys signed documents this week stipulating that the new board will not take any unusual actions without prior notice to Christopher.