Coca-Cola (NYSE:KO) is engaged in a legal battle with a family that asserts possession of about $130 million in the company’s stock. The family of the late Tony Marohn believes that Marohn’s estate rightfully owns about 1.8 million shares of Coca-Cola. The soft-drink maker thinks the claim is a stretch and sued Marohn about three years ago.
The controversy sprouted in 2008 when Marohn purchased an antique Palmer Union Oil stock certificate at an estate sale and traced its lineage to Coca-Cola. According to Reuters, the certificate that Marohn bought was assigned and endorsed. Since the transferee was left blank, Marohn wrote in his name. He later demanded that Coca-Cola exchange his 1,625 Palmer Union Oil shares for 1.8 million shares of common stock.
Coca-Cola not only raised its eyebrows at Marohn’s bold request, but it sued him in Delaware’s Chancery Court and sought a formal declaration entitling him to none of its stock.
“The claim of Mr. Marohn’s estate that it is entitled to millions of dollars in Coca-Cola stock – based on a canceled stock certificate for a long-defunct oil company purchased at an estate sale – is meritless and unfair to the Company’s millions of legitimate shareholders,” said Coca-Cola in a statement released to the press on April 5.
Marohn’s estate argues that there is precedence for courts upholding similar claims in similar stock certificate cases. Its case maintains that Morohn’s signature on the certificate makes it a bearer stock, thus giving legal ownership of the shares to the estate.
According to Reuters, if the Delaware court upholds the claim, Marohn’s estate would become among the largest noninstitutional shareholders of Coca-Cola.