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Call it “smash-mouth” lawyering. Back in 1986, Jack Brown needed a legal edge in a proxy fight for control of Stater Bros. Holdings Inc., a grocery chain based in Southern California’s heartland, where he served as president since 1981. Brown’s La Cadena Investments, with a minority stake, was fighting chairman Bernard Garrett for the chain’s ownership and financial future. The previous year the company had gone public to reduce debt. Now Brown wanted his group to take control and take it private again. “All we ever wanted to do was to be able to control our destiny as supermarket people,” says Brown, a native of San Bernardino who started his supermarket career as a bagger in a corner store. “We never viewed ourselves as investors.” Brown’s local, small-firm lawyer of choice had long been Bruce Varner, whose credentials as an ex-jock rival Brown’s (Varner was a fullback for the University of California at Santa Barbara; Brown was a San Jose State University wide receiver). For this fight, the pair needed big-city muscle. So they called in Andrew Bogen, a corporate partner at Los Angeles’s Gibson, Dunn & Crutcher. In the heady corporate-raider days of the mid-eighties, Bogen led Gibson, Dunn’s proxy takeover group and earned a solid reputation in such matters as defending against T. Boone Pickens’s hostile takeover attempt of Southern California’s Unocal Corporation. “We looked at several lawyers, but he was one of us, a problem solver,” Varner says. (More recently, Bogen was named as one of The American Lawyer‘s Dealmakers of the Year last April for his handling of the Northrop Grumman Corporation takeover of TRW Inc. Currently he’s defending PeopleSoft, Inc., from Oracle Corporation’s hostile bid.) After five months of late nights and what Brown calls some of his “darkest days,” a Delaware court granted corporate ownership to Brown’s La Cadena. With a majority stake in hand, Brown and his group took the chain private in 1987. Since then, Brown has bought out most of the other partners and taken control of the now 67-year-old grocery chain to whip it into shape. The moves he’s made � including acquiring 43 stores from rivals Albertson’s and Lucky � have taken revenues to nearly $3 billion a year and generated gradually increasing profits. One constant throughout this period was Brown’s legal team of Varner and Bogen. Despite their firms’ mismatched sizes, the two say the combination works. When he signed on with Stater Bros., Gibson, Dunn’s Bogen was impressed with Varner’s facility with legal Xs and Os. “[Varner's] a hell of a lawyer, but in that proxy fight he was viewed as a bit of a bumpkin,” recalls Bogen. “I’ll tell you what, he got the better of them on every single issue that came up.” Brown first met Varner while working on a redevelopment project to turn an abandoned gas station into a Boys & Girls Club, and realized that Varner was his man. “In more rural areas it was important to have local counsel that understood the communities we served,” Brown says. They clicked after learning they had been football players in the same college division, and used that frame of mind during the proxy fight. “When we were in Delaware court, we’d tell each other things like ‘It’s fourth and eight, don’t fumble inside the ten,’ ” Brown recalls. As the current secretary, director, and de facto general counsel for Stater Bros. (or, as Brown jokingly refers to him, “out-house counsel”), Varner is firmly entrenched as Brown’s legal quarterback. He tosses most of the chain’s corporate, litigation, real estate, acquisition, and employment work to his own firm, 12-lawyer Varner, Saleson & Brandt of Riverside, California, a 1997 spin-off from his former firm, San Bernardino’s Gresham, Varner, Savage, Nolan & Tilden. But he still retains Bogen and Gibson, Dunn when a big firm is needed for financing, corporate governance, and securities work. Last year the two refinanced the debt on Santee Dairies, Inc., a milk and dairy product producing plant Stater Bros. co-owns with The Kroger Co. Bogen claims not to be jealous of Varner’s lock on Stater Bros.’s business. “It’s a great relationship from our point of view,” he says. “While we’re always looking to expand work, I’m frankly not aware of any services Stater needs that we could provide more effectively than Bruce.” The Forbes list of the 250 largest privately held companies is thick with grocery store chains � 39 of them, a category second only to construction companies � and Stater Bros., ranked number 59 overall, is the sixteenth-largest in its sector. Big grocers have massive inventory volumes and the ensuing high revenues. Stuck in the middle of that pack, Stater Bros. faces stiff competition. Three big players with a lot of stock market capital dominate Southern California’s turf: The Vons Companies, Inc. (owned by Safeway Inc.), Ralphs Grocery Company (owned by The Kroger Co.), and Albertson’s, Inc. Not to mention behemoths Wal-Mart Stores, Inc., and Costco Wholesale Corporation, which have both flexed their retail muscle by making food a key part of their offerings. But Varner isn’t fazed. “We can buy product at the same price. I don’t think capital’s an issue,” he says. “The average distance from a Stater Bros. store to central distribution is 39 miles, so we can service our stores on a regular basis.” Is that enough for success? Possibly. As an ex-fullback, Varner instinctively knows the best strategy is to hold the ball close to your chest and run.

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