Did Ron Burkle Conspire with Hoffa to Acquire Allied?

May 9, 2007: Two shareholders who own 337,000 shares of Allied Holdings filed a class action suit charging that Yucaipa owner Ron Burkle conspired in 2006 with the leadership of the Teamsters to take control of Allied.

The suit, filed under the Racketeer Influenced and Corrupt Organizations (RICO) Act, alleges that in May 2006 Burkle made his move, after his business partner, former President Bill Clinton, helped get Hoffa on board.

The Teamster leadership then arranged for a side-deal of concessions to Yucaipa, and pressured Allied to go along, because the concessions would only be offered if Yucaipa got control of Allied.

The deal was kept quiet until after the November 2006 Teamster election to avoid a “problematic time for Hoffa to have to announce and explain to the rank-and-file membership of the IBT any concessions or givebacks” the lawsuit alleges.

In April, Yucaipa and Allied bought-off another potential competing bidder for the company with $525,000 cash and millions paid for stock.

How much of that comes out of money promised to be used for new equipment is anybody’s guess.

That settlement deal also contains a provision that no one, including attorneys in the case, may give any information to Teamsters for a Democratic Union (TDU). Apparently Yucaipa considers TDU to be a threat.

The suit will not benefit working Teamsters; it will not delay Yucaipa in taking control of Allied, or the 17 percent concessions which will go into effect around June 1.

The lawsuit and the Wall Street Journal report on it are available here.


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