Stockbridge Group Challenges Amserv Board, Alleging Entrenchment and Self-Dealing

Strategic Insights -

The Stockbridge Group, a shareholder coalition that includes Stockbridge Investment Partners, Inc. and Lenox Healthcare, Inc., has filed an amended Schedule 13D with the Securities and Exchange Commission, seeking to remove three Amserv Healthcare Inc. board members and replace them with its own nominees. The Stockbridge Group owns approximately 6.05% of Amserv's common shares. The group has withdrawn its proposal to merge Amserv with York Hannover Pharmaceuticals, citing the Amserv board's alleged efforts to entrench management and dilute shareholder interests.

Key Takeaways:

  • The Stockbridge Group is seeking to remove Amserv board members Eugene Mora, George Rogers, and Ben Spinelli, and replace them with Lawrence B. Cummings, Thomas M. Clarke, and Dr. Stanley J. Evans.
  • The Stockbridge Group owns a total of 178,200 common shares, representing 6.05% of Amserv's outstanding shares.
  • The group alleges that the Amserv board is entrenched and operating in the interests of CEO Eugene Mora, rather than those of all shareholders.
  • The Stockbridge Group claims that the Amserv board has become a "rubber stamp" for management, and has engaged in self-dealing by operating from offices in La Jolla, California, far from the company's operations in New Jersey and Ohio.
  • The group is seeking to remove the existing board and replace it with nominees committed to enhancing the value of Amserv for the benefit of all shareholders.
  • The Stockbridge Group is led by Lawrence B. Cummings, Chief Executive Officer of Stockbridge Investment Partners, Inc., and Thomas M. Clarke, President of Lenox Healthcare, Inc.
  • As of April 6, 1995, Mr. Clarke beneficially owned 178,200 shares of Amserv common stock, and Lawrence Cummings owned indirectly through Stockbridge a total of 153,400 shares.

Statistics:

  • The Stockbridge Group owns 6.05% of Amserv's outstanding common shares.
  • The group's proposal seeks to remove 3 Amserv board members and replace them with 3 nominees.
  • As of April 6, 1995, Mr. Clarke beneficially owned 178,200 shares of Amserv common stock.
  • Mr. Cummings owned indirectly through Stockbridge a total of 153,400 shares of Amserv common stock.

Sources:

  • Amserv Healthcare Inc. press release, April 7, 1995.
  • Stockbridge Investment Partners, Inc. press release, April 7, 1995.
  • SEC Schedule 13D filing, April 7, 1995.