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SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
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[_] Preliminary Proxy Statement [_] Confidential, for Use of the
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Rule 14a-6(e)(2))
[_] Definitive Proxy Statement
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[X] Soliciting Material Pursuant to Section 240.14a-11(c) or Section 240.14a-12
ERLY INDUSTRIES INC.
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(Name of Registrant as Specified In Its Charter)
THE POWELL GROUP
FARMERS RICE MILLING COMPANY, INC.
NANETTE N. KELLEY
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(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
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FOR IMMEDIATE RELEASE
COMPANY CONTACT:
[LOGO OF THE POWELL GROUP]
Nanette Kelley
President
(504) 922-4540
POWELL GROUP SUBSIDIARY FILES LAWSUIT AGAINST
THE SENIOR MANAGEMENT OF ERLY INDUSTRIES
BATON ROUGE, LOUISIANA, AUGUST 14, 1997...Farmers Rice
Milling Company, a wholly-owned subsidiary of The Powell Group, which together
with Powell Group President Nanette Kelley owns approximately 3.8% of the common
shares of ERLY INDUSTRIES, INC. (NASDAQ:ERLY), announced today that it has filed
a lawsuit in U.S. District Court for the Central District of California against
Gerald Murphy, chairman of the board and chief executive officer of ERLY, and
Douglas Murphy, chief operating officer and a director of ERLY, alleging, among
other things, breach of fiduciary duty, waste of corporate assets, and the
making of illegal corporate loans in connection with the defendants' personal
investment in a real estate development project in Texas.
The lawsuit seeks injunctive relief prohibiting ERLY Industries and its
subsidiary, American Rice Company, from continuing to make loan payments on
behalf of Gerald Murphy and Douglas Murphy, repayment by the defendants to ERLY
Industries and American Rice of legal fees and expenses incurred in connection
with the alleged wrongful conduct, and punitive and exemplary damages.
"This is just the latest chapter in the long and sorry history of
mismanagement of ERLY by the Murphys, who since 1987 have produced a pitiful
return for their shareholders totaling less than 1% annually while the Dow Jones
Industrial Average has more than tripled. As major shareholders we intend to put
a stop to this right now," Kelley said.
On July 31, 1997, Kelley and The Powel Group Companies filed a Consent
Solicitation with the Securities and Exchange Commission seeking approval to
solicit ERLY shareholders with respect to removing the current board of
directors and prohibiting the officers of ERLY from excessive expenditure of
corporate funds in connection with the election of directors.
A privately-held holding company based in Baton Rouge, Louisiana, The
Powell Group has interest in rice farming, rice milling and storage, rice
hull-to-electricity generation, radio broadcasting, commercial and residential
real estate development and construction, travel management services and timber.
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