Cases & Investigations
EACO Corp. Derivative Litigation

Wolf Popper LLP represents Alluvial Fund, LP in a derivative litigation against nominal defendant EACO Corporation (“EACO” or the “Company”) and the other defendants Glen F. Ceiley (EACO’s CEO, Chairman, and 96% Controlling Stockholder); William L. Means, Stephen Catanzaro, Ellen S. Bancroft (members of EACO’s Board of Directors); and Donald Wagner (President and COO of EACO’s wholly owned subsidiary Bisco Industries, Inc.).

The lawsuit was filed after an inspection of EACO’s internal books and records by Alluvial and Wolf Popper. The Verified Amended Stockholder Derivative Complaint alleges that the Company’s October 2023 purchase of its headquarters building (the “Property”) for $31 million from a trust owned and controlled by Ceiley was grossly unfair to EACO in terms of both price and process, resulting in significant financial losses for the company. The Amended Complaint alleges that the $31 million purchase price for the Property was inflated by millions of dollars above what EACO would have paid in an arm’s length transaction.

Among other things, the Amended Complaint alleges that Ceiley violated Fla. Stat. § 607.0832 (Directors Conflict of Interest), and the other defendants aided and abetted those violations, because the purchase transaction was not fair in terms of Ceiley’s dealings with EACO, and because the price paid for the Property was not comparable to what EACO would have paid in an arm’s length transaction. The Amended Complaint also claims that Ceiley breached the fiduciary duties he owed to EACO under Florida law by, among other things, selling the Property to EACO at a materially inflated price, and that Means, Catanzaro, and Bancroft breached the fiduciary duties they owed to EACO by, among other things, approving the purchase of the Property and failing to properly supervise and evaluate the purchase of the Property, which was an obvious conflicted transaction between the Company and its CEO, Chairman, and 96% Controlling Stockholder.  In addition, the Amended Complaint alleges that Means, Catanzaro, Bancroft, and Wagner aided and abetted Ceiley’s violations of Fla. Stat. § 607.0832, and that Wagner aided and abetted Ceiley, Means, Catanzaro, and Bancroft’s breaches of fiduciary duties.

The lawsuit seeks to hold Ceiley, the board members, and Wagner accountable for these statutory breaches and fiduciary failures, demanding that they reimburse EACO for the financial damages caused by the unfair Property purchase and inflated purchase price. The estimated overpayment represents a significant loss to the company and underscores severe governance failures among EACO’s leadership and directors.

The case is Alluvial Fund, LP v. Glen F. Ceiley, et al., No. CACE 24-012180, pending in the Circuit Court of the Seventeenth Judicial Circuit, in and for Broward County, Florida.

Phone: Carl. L. Stine - (212) 451-9631
Phone: Joshua W. Ruthizer - (212) 451-9668
Phone: Emer C. Burke - (212) 451-9625
Email: Outreach@wolfpopper.com