In a protracted legal dispute, a New York state Supreme Court judge has ruled that the AriZona Iced Tea group of companies was worth about $2bn in October 2010. Setting the figure allows one of two feuding co-owners to sell his stake in the business.
AriZona, which had said in court that setting too high a price could drive it into bankruptcy, said after the ruling that it was ‘confident the court will protect the livelihood of the company’s nearly 1,000 employees.”
Arizona-ice-tea-hq by Americasroof – Own work. Licensed under Creative Commons Attribution-Share Alike 3.0 via Wikimedia Commons.
Justice Timothy Driscoll set the company’s valuation between the competing claims proffered in court. The legal team of Domenick Vultaggio claimed the value was roughly $426m. The other owner, John Ferolito – who wants to sell his stake – claimed the value was $3.2bn.
In his ruling, Justice Driscoll said that AriZona would have to pay Ferolito and a family trust about $1bn, but that the court would consider the risk of insolvency in setting terms and conditions of the payout.
AriZona was founded in Brooklyn in 1992. In 1998 the partners agreed that Vultaggio would run the company’s day-to-day operations. By 2005, Ferolito was seeking a sale to let him cash out his shares.
According to Beverage Digest, AriZona had a 37.4% share of the US ready-to-drink tea market, ranking it ahead of PepsiCo’s Lipton and Coca-Cola’s ice tea brands.
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