More Critchley: Board holds off on recommendation for UBS shhttps://business.financialpost.com/news/fp-street/board-holds-off-on-recommendation-for-unique-broadband-systems-shareholders
Board holds off on recommendation for Unique Broadband Systems shareholders
Barry Critchley | April 14, 2015 4:46 PM ET
As the group that represents shareholders’ interests, directors play an important role.
Aside from watching over management, they also give their collective wisdom of what shareholders should do for a so-called corporate event. In virtually every case – save for the ending of the dual-class share structure at Magna International in 2010 – they give a recommendation.
To that small list can now be added Unique Broadband Systems Inc. a company with a long and not too successful history — a company that was the subject of a successful dissident action in 2010 and a company that is having an annual meeting next month.
At that meeting, shareholders of the company that has been in bankruptcy protection since 2011 will be asked to support one of two plans: one led by Robert Ulicki, a former director who helped spearhead dissident action; and the other by Alex Dolgonos, a UBS consultant at the time of the dissident action. Both have put forward three director nominees and plans for the company that has dealt with all the claims of its creditors, has some cash, an 11.7% stake in ONEnegy Inc. and lots of tax losses.
Ulicki, who is one of his team’s three nominees, has prepared a circular asking for support; while Dolgonos, who isn’t planning to stand, hasn’t so far. Instead he has incorporated some information in the company’s circular.
And that approach seems contrary to a Feb. 26 court order where Justice Wilton-Siegel wrote: “By March 30, 2015, the Dolgonos Parties and the Ulicki Parties, will, if they have proposed nominees, provide to UBS dissident information circulars, which shall include information regarding their respective visions for the Applicant’s post CCAA business.”
UBS’s board has chosen not to make a decision on the two plans: instead it wants to “facilitate in a neutral fashion an orderly transition to a new board of directors who will in turn direct the future business of UBS.”
Given the company’s recent history and given what has already been achieved that decision seemed strange – and different from the norm. We called chairman Vic Wells for an explanation.
Wells, who will be stepping down at the May 4 meeting, said UBS “is going through a very unusual process,” namely the emergence from CCAA. And with a different result than the norm: it has settled with the creditors, has some assets and something for shareholders.
“It was always the goal that shareholders would have a vote, if we could, in the future of the company. But because we are operating under CCAA, it was a complicated process to decide how we could do it,” a process that required getting a court order.
“Under those circumstances,” said Wells, “we felt it was not prudent for us to make a recommendation. We felt it was right for the shareholders to make the call provided everybody was given full information. It is a different process when you are in CCAA.”
Asked why UBS hasn’t insisted the Dolgonos Group file a circular as required under the court order, Wells said, “we have tried to make the process as fair and have it completed as expeditiously as possible.”
Neither Ulicki nor Dolgonos could be reached for comment.
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What a bunch of disingenious directors!
With AD's background and actions, was it really not prudent, difficult or unfair to give an opinion for shareholders?
There is no way I am going to vote for AD, no matter what he may promise to do. As far as I am concerned, his actions over the years have spoken loud and clear.
Ulicki has my votes.