Central Pacific questions
shareholder vote in courtMeanwhile, a declared CPF
supporter votes some shares in
favor of City Bank's position
On the same day that Central Pacific Financial Corp. scrapped plans for a special shareholders meeting, a CPF attorney alleged in state Circuit Court yesterday that proxies representing 159,560 shares from CB's May 28 vote may have been defective.
Also the parent of City Bank disclosed that its largest shareholder, which had a voting agreement with CPF, had cast 52,677 unrestricted shares against CPF's proposal to acquire a majority of CB stock as part of CPF's hostile merger attempt.
State Circuit Court Judge Victoria Marks said yesterday she was continuing CB's motion for summary judgment of CPF's lawsuit to allow Central Pacific Bank's parent to conduct discovery following disputes that arose last week during a proxy review of the May 28 meeting. The hearing is now scheduled for 8:30 a.m. Aug. 18.
Special counsel James Masella III, one of CPF's representatives at last week's review in Newark, Del., said in a declaration that a number of the proxies, representing approximately 159,560 CB shares that voted against CPF's proposal, may be invalid because of suspicious markings. Masella, who is with the law firm Sullivan & Cromwell LLP, said several of the proxies "contained writing in different colors of ink and, apparently, different handwriting."
Masella said challenges of those proxies were denied by IVS Associates Inc., the independent inspector of elections, and CPF had no other recourse but to take the issue to court. Since one proxy can represent thousands of shares, CPF is hoping the cancellation of some of the proxies will result in CB failing to achieve a quorum at its May 28 meeting and thus invalidate the election results. IVS' certification of the votes revealed that CB had exceeded a quorum -- defined as 50 percent of the eligible votes, plus one -- by only 12,989 shares.
Meanwhile, a filing late Monday disclosed that Ton Finance B.V., CB's largest shareholder with an 8.9 percent stake, had voted 52,677 of its shares against CPF's proposal, but those votes were not included in the announced results. The vote caught CPF by surprise because it had beneficial ownership of Ton's other 295,587 shares and didn't vote them. CPF had been urging CB shareholders not to vote at the meeting and instead to wait until the June 26 meeting that it called off yesterday. Ton Finance's attorney did not return several calls for comment.
Earlier yesterday, CPF cited continue obstacles put up for CB as the reason for canceling the June 26 meeting that CPF had called and CB claimed was invalid.
CPF, however, vowed to carry on its pursuit of the hostile merger and said it now will focus its efforts on securing all necessary regulatory approvals for its combination with City Bank's parent.