1. Equus Total Return
The incumbents won. Dissidents claim moral victory. Why am I reminded of Calvin & Hobbes? Calvin would claim a moral victory even when Susie turned the tables on him, and of course he could count on the support of one tiger pal.
As I've noted here Equus Total Return is a business development company (BDC) HQ-ed in Houston that trades as a closed-end fund on the New York Stock Exchange.
The Committee to Enhance Equus says: "We also believe that the Company conducted the meeting in a manner intended to discourage personal attendance and voting by shareholders....Despite these concerns about the integrity of the process, we have concluded that further contest of the 2010 board election is not in the best interests of the Company or its shareholders."
2. Greg Meyer
Greg Meyer, a shareholder of Blockbuster (NYSE: BBI), seeks to have himself elected to that company's board.
The meeting is scheduled for June 24, in Dallas, Texas.
Control of the board is not at issue. So far as I can tell, Meyer represents only himself and would occupy just one seat out of seven. The one currently held by Gary Fernandes.
3. Seattle pension fund demand rejected.
Meanwhile, a court has told pension fund managers in Seattle that they should act like big boys and wipe those tears, despite losses in connection with Epsilon Global Active Value Fund II.
The Seattle City Employees' Retirement System had requested a preliminary injunction to force Epsilon executives to provide audited financial statements etc.
The judge, Richard Jones of the U.S. District Court, observed that "SCERS did not contract for transparency" when it made the investment.
Showing posts with label Blockbusters. Show all posts
Showing posts with label Blockbusters. Show all posts
Sunday, May 30, 2010
Wednesday, March 4, 2009
Circuit City RIP
It seems certain now that Circuit City's bankruptcy proceedings are coming to an end as a liquidation, that hope for a reorganization and survival is gone.
The House subcomittee on commercial and administrative law, a panel of the House Judiciary Committee, had planned to take testimony from CC executives with an eye to potential amendments of bankruptcy law but that hearing was cancelled yesterday morning, apparently due to weather.
It appears that the executives wanted to complain largely about the way in which leases are treated under the 2005 amendments. It appears that before that year it was easier than it is now for a debtor to string out an old lease at the expense of its landlord.
Personally, I can't work up any sympathy for CC on that point -- unless there is something to it that I don't yet understand (very possible). But why should debtors be assistesd at the expense of their commercial lessors? Amending the law one way or the other on that point sounds like a zero-sum game to me.
[Subsequent interpolation, 3-5-09: The hearing has been rescheduled for 3-11, Wednesday, at 2 PM].
This is pertinent to general subject of this blog, the use of proxy campaigns to exercise power in and over the corporate suite ... how?
Circuit City is an example of a proxy partisan unheeded. It now appears obvious that the activist investors of HBK Capital Management were in the right a year ago, when they tried to get CC to sell itself to Blockbusters. That would have been the best way to maximize the equity that was then rapidly vanishing.
The House subcomittee on commercial and administrative law, a panel of the House Judiciary Committee, had planned to take testimony from CC executives with an eye to potential amendments of bankruptcy law but that hearing was cancelled yesterday morning, apparently due to weather.
It appears that the executives wanted to complain largely about the way in which leases are treated under the 2005 amendments. It appears that before that year it was easier than it is now for a debtor to string out an old lease at the expense of its landlord.
Personally, I can't work up any sympathy for CC on that point -- unless there is something to it that I don't yet understand (very possible). But why should debtors be assistesd at the expense of their commercial lessors? Amending the law one way or the other on that point sounds like a zero-sum game to me.
[Subsequent interpolation, 3-5-09: The hearing has been rescheduled for 3-11, Wednesday, at 2 PM].
This is pertinent to general subject of this blog, the use of proxy campaigns to exercise power in and over the corporate suite ... how?
Circuit City is an example of a proxy partisan unheeded. It now appears obvious that the activist investors of HBK Capital Management were in the right a year ago, when they tried to get CC to sell itself to Blockbusters. That would have been the best way to maximize the equity that was then rapidly vanishing.
Tuesday, February 19, 2008
Non-core acquisitions
Sometimes the management of a company will come under fire from its shareholders for a policy of "non-core acquisitions."
The idea is that a company should "stick to its knitting," should do what it does best. If a company has been successful in the past in the "core" area, then it has an edge there -- not just the initial success itself, but the institutional know-how built up over time, and the fact that suppliers and customers in that field have both presumably grown accustomed to its face.
There is another thought behind the complaint about "non-core acquisitions." This is the idea that "we, the stockholders don't pay you, the managers, to diversify our portfolios for us. We'll do that for ourselves."
Let's get back to the point at which we left the matter yesterday. Presumably, if I've just bought stock in Comcast, it is because I wanted some exposure in my portfolio to the risk-reward profile found historically in the type of business I know Comcast to be in. If I also want something safe (or something more risky but promising) in there, I'll also buy that. It impedes my ability to get the balance I want if the managers of the particular stocks involved are shifting their own profile.
Now we can move forward a step. I can't say I have much sympathy with this sort of complaint. After all, managers are also often criticized for failing to diversify. Suppose Blockbusters had stuck doggedly to its brick-and-mortar stores (its "core assets") and ignored the fact that the technology for movie-purchase was changing on them. They'd be defunct. But they did anticipate the change and diversify in time, doing "non-core" things in the process, which is why they're a tenable company today. Of course, along the way they made a few false steps, such as a deal with Enron but ... hey ... that's show biz.
My point then is simply that the core/non-core distinction is not itself very useful, and that when we find it being invoked, we should try to look more closely at what is really at stake.
The idea is that a company should "stick to its knitting," should do what it does best. If a company has been successful in the past in the "core" area, then it has an edge there -- not just the initial success itself, but the institutional know-how built up over time, and the fact that suppliers and customers in that field have both presumably grown accustomed to its face.
There is another thought behind the complaint about "non-core acquisitions." This is the idea that "we, the stockholders don't pay you, the managers, to diversify our portfolios for us. We'll do that for ourselves."
Let's get back to the point at which we left the matter yesterday. Presumably, if I've just bought stock in Comcast, it is because I wanted some exposure in my portfolio to the risk-reward profile found historically in the type of business I know Comcast to be in. If I also want something safe (or something more risky but promising) in there, I'll also buy that. It impedes my ability to get the balance I want if the managers of the particular stocks involved are shifting their own profile.
Now we can move forward a step. I can't say I have much sympathy with this sort of complaint. After all, managers are also often criticized for failing to diversify. Suppose Blockbusters had stuck doggedly to its brick-and-mortar stores (its "core assets") and ignored the fact that the technology for movie-purchase was changing on them. They'd be defunct. But they did anticipate the change and diversify in time, doing "non-core" things in the process, which is why they're a tenable company today. Of course, along the way they made a few false steps, such as a deal with Enron but ... hey ... that's show biz.
My point then is simply that the core/non-core distinction is not itself very useful, and that when we find it being invoked, we should try to look more closely at what is really at stake.
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