A response to legal action taken against Geneva Steel and one of its officials will be filed this week in 4th District Court this week, two officers of the steel company say.
Robert J. Grow, Sandy, Geneva's executive vice president, and Constance K. Lundberg, Orem, a director of the steel company and also a Brigham Young University Law School professor, say the action will be in response to a suit filed Friday by Christopher B. Cannon, Maple-ton, against his brother Joseph A. Cannon, Provo, and Geneva.Christopher B. Cannon filed the suit in the court against Joseph and the company, saying Joseph 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," Christopher Cannon said Friday.
In contacting the Deseret News Saturday, Lundberg, who was Geneva's outside legal counsel from 1972-86, and Grow said they look forward to the court's resolving the allegations that Christopher Cannon brought against the company.
"Nothing in the litigation should interfere with the ongoing management of the company. We are confident that the company and Joe (Cannon) will be successful," Lundberg said.
She and Grow said they represent about 80 percent of the ownership and 100 percent of the management of the company, with which Christopher Cannon is in dispute.
About 10 or 11 shareholders own or have a right to own (all rights to shares in the company held by lenders have not been fully exercised) 80 percent of the company, the two officials said.
"That 80 percent of the company on Nov. 22 voted for the continued leadership of Joe Cannon and the management team that he has put in place. Now Chris (Cannon), a 15 percent shareholder, has sued both the company and its president and chairman, Joe Cannon, alleging that the 80 percent should not have their voice heard. Their voice has been heard. The company is operating very successfully under leadership of Joe Cannon," Grow said.
Lundberg, whose husband, Boyd C. Erickson, is Geneva vice president of engineering and environment, said the core of the dispute between Christopher Cannon and the rest of the owners is "how to spend Geneva's previous and limited resources.
"We would like to spend that money to modernize the plant so that in five years we will have a more efficient plant, producing higher-quality steel at a lower cost with a cleaner environment," she said. `As we understand it, Chris basically wants to take money out of he existing business to buy out some of the present owners who disagree with him and invest in other businesses."
If Geneva Steel is modernized over the next few years, "it will become the lowest-cost steel producer in America that can survive any downturn in the steel market," Grow said.
Grow said the "entire Cannon family owns slightly more than one-third of Geneva, with the rest being owned by lenders who put up high-risk money to reopen the plant and other Utah shareholders who helped acquire the plant."
Christopher B. Cannon and Joseph A. Cannon reorganized Geneva Steel and brought the former USX Corp. plant back into operation.
Christopher Cannon has said his civil suit seeks to rescind the actions taken at a shareholders' meeting and "is a last resort to put the company back on track to realizing the vision we once shared."
"Regardless of whether Chris wins or loses his argument about the board of directors, he has been fired. He was fired by the board that we replaced on Nov. 22. That action was confirmed by the board elected Nov. 22," Lundberg said.