Disgust at the mismanagement of a pounds 120m capital investment programme has seriously undermined shareholder confidence in Peter Barr, Hazlewood's chairman.
Christopher Ball, Hazlewood's UK chief executive, has already resigned. But shareholders think further changes are necessary.
One institution contacted by the Independent on Sunday said: 'The chairman carries the ultimate responsibility. The situation there almost beggars belief. The management has no credibility.'
Over the past year, the market value of Hazlewood has slumped by one third. This time last year, it was worth pounds 440m. It is now worth pounds 299m.
With Hazlewood under strain, shareholders are also ready to entertain takeover bids. 'With a valuation as low as this, trade buyers must be interested in Hazlewood,' said a representive from the leading institution.
Mr Ball will get compensation for loss of office of two years' salary or pounds 250,000. Mr Barr was paid pounds 286,000 in 1993.
Other directors include Francis Lee, who is also chairman of Manchester City football club.
Disillusionment with Hazlewood management has been been growing among shareholders for some time. Profits and earnings per share have grown little during the past five years.
Taxable profits in 1989 were pounds 45m. They rose to pounds 60m in 1991, but slipped back to pounds 51m for the year ended last 31 March.
Earnings per share peaked at 21p in 1991 but slid to 15p last year. Analysts predict that earnings this year and next will be be less than 15p.
Following Hazlewood's sorry admissions in its results last week, analysts cut profit estimates for the current year from pounds 55m to pounds 45m.
Hazlewood received some plaudits for developing what was widely thought to be a sound strategy. It wanted to tackle internal difficulties and problems posed by intense competitive pressure among food manufacturers.
It targeted ready meals as one of the few avenues for growth in its depressed sector and spent heavily on capital equipment to become an efficient and low-cost operator.
However, implementation of the capital investment programme has caused the company problems.
When it published its annual results last week, the company identified four plants where it said it was making an unsatisfactory return on the investment.
Michael Bourke, food analyst at stockbroker Panmure Gordon, said: 'Hazlewood tried very hard to brush up its image in the City.' But he added: 'That policy is now lying in tatters.'
Mr Bourke also said that Mr Barr's position looked precarious. 'People have lost a lot of money, and there's always pressure when that happens.'
The worst problems with the investment programme came at the Hilliers subsidiary in Plymouth.
Hazlewood bought Hilliers from the rival food company Northern Foods. Hazlewood wanted capacity to meet demand from Asda, a big customer, for fresh quiches and pies. It spent pounds 9.4m upgrading the site.
But Hazlewood has found it difficult to supply Asda's shops - which are concentrated in the North - with fresh produce from west country plant in Plymouth.
It has also run into problems at factories in Sheffield, Wrexham, and Waltham Abbey in Essex.
Mr Barr was meeting institutional shareholders last week, following the announcement of the difficulties on Tuesday.
The company declined to comment on the situation.