Kozol Family Feud Over Beer Fortune: Lawsuit

JOLIET, IL - Kozol Brothers Inc. has distributed domestic, craft and import beer since 1934 and KBI is a local institution, headquartered here in Joliet. While the beer industry is booming, all is not well at KBI. There's acrimony brewing inside the Kozol family over control of the family fortune. This month, a civil lawsuit was filed at the Will County Courthouse concerning Kozol Brothers suing Kozol Brothers. The plaintiffs are siblings Michelle, Stephanie and Tony Kozol. On the other side is brother Ed; he is both the trustee and beneficiary of the Kozol Family Trust, according to the lawsuit.

"In addition, Ed is an officer, director, president and registered agent of KBI as well as the president and registered of Askem," the lawsuit states. Both privately held corporations are located at 2010 South Briggs St. (Askem facilitates leasing transactions for KBI, the suit noted.)

Although Ed became president of KBI in 2001, he did not take complete control until after his father, Buck Kozol, died on Sept. 6, 2010. "At one of the services for their father, Ed ... pulled the Minority Shareholders aside and presented them with a blank signature page," the lawsuit stated.

Background: Joseph "Buck" Kozol's Obituary

The lawsuit adds that, "Never anticipating that their brother would take advantage of their grief, the Minority Shareholders signed the blank signature page. It was not until November 2017 that the Minority Shareholders received a full copy of this Stockholders Agreement ... Pursuant to the Stockholders' Agreement, Ed was the only voting shareholder of KBI and assumed all control over KBI and its operations."

There is deep mistrust in the family surrounding Ed Kozol's leadership at KBI.

From 2010 until the filing of the recent lawsuit, "Ed has systematically cut the Minority Shareholders off from all information regarding KBI, Askem and the Family Partnership, and, despite repeated requests, refused to turn over documents that the Minority Shareholders were entitled to under the Business Corporation Act," the plaintiffs argue.

The lawsuit in Will County brought by Michelle, Stephanie and Tony accuses brother Ed of "mismanagement and oppressive conduct."

In 2013, Ed Kozol and KBI entered into an employment agreement that gave him a base salary of $470,000 and a 2 percent increase every year after that, the lawsuit contends. Additionally, depending on KBI's profits, Ed was eligible for a $200,000 bonus in 2013, $205,000 in 2014, $210,000 in 2015, $220,000 in 2016 and $225,000 in 2017.

"Despite these contractual terms, Ed's compensation as president of KBI nearly doubled from $491,000 in 2015 to $906,000 in 2016," the lawsuit contends. "Upon information and belief, Ed used his power to influence the Board of KBI to pay him an excessive bonus."

Since 2010, the suit alleges, "despite his ample salary and bonuses, Ed has spent KBI, Askem and Family Partnership funds on his personal and family expenses, including living and entertainment expenses for his wife, girlfriend, stepson, son and daughters.

"Since Ed assumed operational control of KBI, KBI no longer follows the Stockholder's Agreement provisions."

The lawsuit seeks a declaratory judgment from the Will County judicial system, contending that the minority shareholders are entitled to review and get financial and corporate information about KBI, including their ownership interests.

Kozol Brothers formed in 1934. It's headquartered in Joliet.

The plaintiffs informed the court that last year, on March 21, June 20, Sept. 29, Oct. 25, and Nov. 22 "as well as during numerous telephone conferences, the Minority Shareholders, through counsel, have repeatedly requested various corporate books, records and other information from KBI. Any further demand would be futile."

According to the suit:

Plaintiff Michelle Kozol Littman lives in Florida. She owns 2,296.4 shares of KBI.

Plaintiff Stephanie Kozol Friedrich lives in Illinois. She owns 2,296.4 shares of KBI.

Plaintiff Anthony "Tony" Kozol lives in Illinois. He owns, 2,146.4 shares of KBI.

Defendant Ed Kozol lives in Illinois. He owns 8,852.8 shares of KBI.

All four are beneficiaries of the Kozol Family Trust.

For more, visit the Kozol Brothers website here.

Main image via Google Maps, other images via John Ferak, Joliet Patch Editor