06.05.2015

Essex challenged

Casey Capital which owns almost six percent of US based Essex Crane Rental has filed paperwork to offer an alternative choice of non-executive directors to those proposed by the crane company.

The move follows the resignation of two of the company's long-standing directors, John Nestor and Dan Blumenthal who will stand down at the Annual General Meeting on June 4th. So far Essex has put forward Thomas Ryan, Jr. and is second candidate.

In a letter to other shareholders, Kevin M. Casey of Casey Capital raises the wish to seek representation on the board of directors for its nominees, and makes three clear points:
1.To elect its nominees, Lee D. Keddie and John M. Climaco to the board of directors of the company in opposition to the company's incumbent directors.
2.To hold a non-binding advisory vote on executive compensation of the company's named executive officers.
3.To consider and act upon such other matters as may properly come before the Annual Meeting.

The letter continues: “We believe that the company is in urgent need of fresh perspective and a focus on enhancing stockholder value, which, we believe, our nominees will provide. We are seeking to change two members of the board to ensure that the interests of the stockholders, the true owners of the company, are appropriately represented in the boardroom. The board is currently composed of six directors, two of whom are up for election at the Annual Meeting”.

In the meantime Essex has confirmed that Thomas Ryan has accepted its invitation to join the board, although this is of course subject to his being elected at the AGM. Ryan is managing partner of Redwing Consulting and serves as a Senior Advisor/Investment Banker for Cascadia Capital. Between 2008 and 2012 he was chief executive of PODS Enterprises, a leader in the containerized moving and storage industry.

He has also served as general manager of Johns Manville/Berkshire Hathaway, a wholly-owned building products subsidiary of Berkshire Hathaway; president of IR Retail Solutions, the industrial services division of Ingersoll Rand, general manager of AlliedSignal Aftermarket Europe and a senior consultant at Price Waterhouse Coopers.

Essex chairman Laurence S. Levy said: "We are delighted to have someone of Tom's background and experience join our board of directors. We believe that Tom will provide invaluable insight and support as we continue to implement our strategic initiatives that have already led to positive operating results. We are confident that Tom's successful experience as CEO of PODS, a company in the business of the rental of long-lived assets, will enable him to add value as a member of Essex's Board".

He also said: "As part of the nominating committee's search process, the board has extended an offer to Lee Keddie - an activist stockholder who, despite holding only 500 shares for only 50 days, has threatened to pursue a hostile proxy contest - for his purported director nominees to be evaluated by our nominating committee. Mr. Keddie, to date, has been non-responsive to our offer. We have informed Mr. Keddie that his nomination notice is defective and that he will not be entitled to make nominations at our upcoming Annual Meeting, but Mr. Keddie has nonetheless continued his campaign."

"We do not believe it is in stockholders' best interests for the company to engage in an adversarial process with Mr. Keddie, and we have informed Mr. Keddie that we and our stockholders would prefer to avoid the unnecessary expense and management distraction of such a process. Mr. Keddie, however, through his non-responsiveness, appears not to care about these stockholder concerns. Notwithstanding Mr. Keddie's recalcitrance and de minimis investment in the company, the Board has left its offer to Mr. Keddie open, and we will continue to make every effort to resolve Mr. Keddie's issues on an amicable basis."

Vertikal Comment

Essex has struggled off and on almost since it was acquired in 2008 by Hyde Park Acquisition Corp, managed by Laurence and Edward Levy. Hyde Park acquired Essex from Kirtland Capital Partners for $210 million, and took on a large amount of debt. It then rescued Coast Crane from Chapter 11 bankruptcy and merged the two businesses.

In spite of improving revenues, losses at the company continue to mount, causing it to announce that it is now seeking alternatives for the Essex rental business.
See Essex seeks alternatives
Essex acquires Coast Crane
See Essex Crane Acquired