IBJNews

Noble Roman's top investor loses Green Mountain chair

Back to TopCommentsE-mailPrintBookmark and Share

Green Mountain Coffee Roasters Inc. has stripped founder Robert P. Stiller of his position as chairman after he sold shares to meet a margin call at a time when the company’s trading policies prohibited such sales.

Stiller is the largest investor in Indianapolis-based pizza chain Noble Roman's Inc., owning nearly 20 percent of the company's stock.

Vermont-based Green Mountain said Tuesday that Michael J. Mardy, chairman of the company's audit and finance committee, will serve as interim chairman starting immediately. Board member William D. Davis, who also violated the trading policy, will no longer serve as lead director, the company said. Stiller and Davis will remain on the board without pay and won’t serve on any committees, Green Mountain said.

The board turmoil marks a new obstacle for a company already combating increased competition from other makers of single-cup coffee brewers and the pods that fill them. Green Mountain has also been criticized by hedge fund manager David Einhorn, who in October questioned its accounting practices.

“People who are on the board know what’s going on with their corporation much more than people on the outside,” Tamar Frankel, professor at Boston University School of Law, said. “One of the main issues is insider trading.”

Together, Stiller and Davis sold about 5.5 million shares at times when the company’s internal trading policy prohibited trading, Green Mountain said in the statement.

Green Mountain stock fell as much as 5.1 percent, to $25.03 per share, in extended trading Tuesday. The shares had dropped 41 percent this year through Tuesday.

Green Mountain called the forced sales “disappointing” and said Stiller and Davis are required to settle outstanding margin loans by the end of this year.

Stiller told CNBC late yesterday that he didn’t break any regulations or laws with the stock sale.

“I am really shocked and hurt,” Stiller told CNBC. “I’ve always been transparent with the board. I think it’s an overreaction.”

Stiller, who founded Green Mountain in 1981 as a small Vermont cafe and served as CEO from 1981 until May 2007, has put about 12.5 million of his Green Mountain shares into margin accounts or pledged them as collateral for at least one loan, according to the company’s latest proxy statement.

About $125.5 million of Stiller’s Green Mountain stock, or about 5 million shares, were sold on May 7 to meet margin requirements after the shares tumbled last week, according to a filing with the U.S. Securities and Exchange Commission. Green Mountain on May 2 reported revenue that trailed analysts’ estimates, sending the shares down 48 percent the next day.

The sale brought Stiller’s stake down to about 8.39 million shares, making him the fifth-largest holder, from 13.4 million as of March 27, according to data compiled by Bloomberg.

Davis sold about 400,000 shares on May 4 and about 148,000 on May 7, Green Mountain said.

The company’s governance and nominating committee will review appropriate board and committee structure and composition, Green Mountain said in the statement.

Stiller sold $66.3 million of his stake in the company earlier this year before Starbucks Corp. announced a coffee brewer that will compete with Green Mountain’s Keurig machine. In addition to his stake in Noble Roman's, he is the second-biggest shareholder of Krispy Kreme Doughnuts Inc.

Stiller’s loss of the chairman role should serve as a “cautionary tale” to other officers to “avoid making margin loans or margin investments based on your company’s stock,” said Rick Munarriz, a Miami-based analyst at the Motley Fool.
 

ADVERTISEMENT

Post a comment to this story

COMMENTS POLICY
We reserve the right to remove any post that we feel is obscene, profane, vulgar, racist, sexually explicit, abusive, or hateful.
 
You are legally responsible for what you post and your anonymity is not guaranteed.
 
Posts that insult, defame, threaten, harass or abuse other readers or people mentioned in IBJ editorial content are also subject to removal. Please respect the privacy of individuals and refrain from posting personal information.
 
No solicitations, spamming or advertisements are allowed. Readers may post links to other informational websites that are relevant to the topic at hand, but please do not link to objectionable material.
 
We may remove messages that are unrelated to the topic, encourage illegal activity, use all capital letters or are unreadable.
 

Messages that are flagged by readers as objectionable will be reviewed and may or may not be removed. Please do not flag a post simply because you disagree with it.

Sponsored by
ADVERTISEMENT

facebook - twitter on Facebook & Twitter

Follow on TwitterFollow IBJ on Facebook:
Follow on TwitterFollow IBJ's Tweets on these topics:
 
Subscribe to IBJ
  1. From the story: "The city of Indianapolis also will consider tax incentives and funding for infrastructure required for the project, according to IEDC." Why would the City need to consider additional tax incentives when Lowe's has already bought the land and reached an agreement with IEDC to bring the jobs? What that tells me is that the City has already pledged the incentives, unofficially, and they just haven't had time to push it through the MDC yet. Either way, subsidizing $10/hour jobs is going to do nothing toward furthering the Mayor's stated goal of attracting middle and upper-middle class residents to Marion County.

  2. Ron Spencer and the entire staff of Theater on the Square embraced IndyFringe when it came to Mass Ave in 2005. TOTS was not only a venue but Ron and his friends created, presented and appeared in shows which embraced the 'spirit of the fringe'. He's weathered all the storms and kept smiling ... bon voyage and thank you.

  3. Not sure how many sushi restaurants are enough, but there are three that I know of in various parts of downtown proper and all are pretty good.

  4. First off, it's "moron," not "moran." 2nd, YOU don't get to vote on someone else's rights and freedoms that are guaranteed by the US Constitution. That's why this is not a state's rights issue...putting something like this to vote by, well, people like you who are quite clearly intellectually challenged isn't necessary since the 14th amendment has already decided the issue. Which is why Indiana's effort is a wasted one and a waste of money...and will be overturned just like this has in every other state.

  5. Rick, how does granting theright to marry to people choosing to marry same-sex partners harm the lives of those who choose not to? I cannot for the life of me see any harm to people who choose not to marry someone of the same sex. We understand your choice to take the parts of the bible literally in your life. That is fine but why force your religious beliefs on others? I'm hoping the judges do the right thing and declare the ban unconstitutional so all citizens of Wisconsin and Indiana have the same marriage rights and that those who chose someone of the same sex do not have less rights than others.

ADVERTISEMENT