Continental Materials Hit With Suit Over Founding Family Buyout

Continental Materials Corp., which owns heating and hardware companies, was sued in Delaware by a shareholder looking to investigate whether a partial buyout by its founders’ heirs undervalued the company for self-dealing reasons.

The lawsuit seeks to lay the groundwork for fiduciary breach claims against members of the Gidwitz family—who owned 61% of the company through Bee Street Holdings LLC at the time of the deal—and other CMC directors.

It requests corporate records under a state law giving shareholders expansive inspection rights if they credibly suspect board wrongdoing.

Bee Street “initiated an unsolicited tender” last month, seeking to acquire a ...