Critchley: Things still messy at UBS
Things still messy at Unique Broadband
Barry Critchley, Financial Post · Tuesday, Mar. 1, 2011
Last July, before they mounted a successful challenge, they were a group of dissident shareholders aiming to oust the insiders at Unique Broadband Systems Inc.
At this year's meeting, held Friday, Robert Ulicki, Grant McCutcheon and Henry Eaton were the insiders, forced to explain what they had done over the past six months and ready in the event of a challenge from the former insiders.
If a challenge did take place, the best approach would be not to publish a dissident proxy circular -but rather to try to lock up the support of not more than 15 shareholders and mount a battle from the floor -and hope they had enough votes.
But for the second time in just over six months, the majority of the votes cast by UBS shareholders were cast for the former dissidents.
Enough shareholders were prepared to give the new team more time to implement its strategy, a key element of which is to try to recover monies paid to the former insiders it feels was not justified. If some of the $23-million cash either paid out or allocated following the $64-million sale of the company's spectrum assets is recovered, shareholders will benefit.
But given Friday's vote, the acrimony between the two sides -reflected in the lawsuits and counter suits -will continue. Meantime, the new team has a year to make good.
"I bought my shares as a play on the lawsuits. If management wins, the stock has some upside, but if the former group get back in, the stock goes to zero," said one UBS shareholder, one of two dozen in attendance Friday.
Certainly the former insiders -via their legal representatives -were active: The meeting was delayed for 80 minutes while the sides discussed votes already sent in. When the meeting got underway it didn't take long for the former insiders to act: They wanted to see the results of the votes cast. Chairman Ulicki said he would take the matter "under advisement."
Unfazed, the former insiders nominated three directors to compete against the management slate. So there was another vote, another 30 minute delay. The result was more bad news for the former insiders.
But they moved two more motions requesting the results of the votes be made available. Such knowledge would be useful to them as it would indicate how close they were to victory -and whether they had the momentum to mount a fresh proxy battle.
UBS is under no obligation to disclose such information because its shares are listed on the TSX-Venture exchange. (It is a requirement for companies listed on the TSX exchange.) When the votes were tallied, the result was another defeat for the former insiders.
What's next? We know UBS management will press on. "Shareholders do support you," Ulicki said in his closing remarks when thanking UBS chief executive McCutcheon for the hard work he has done to date.
Those efforts have already seen three former insiders agree not to take $1.7-million in awards they have been granted.
UBS is responding to requests for information from securities regulators, which are presumably interested in how the $23-million was determined and how it was disclosed.
The situation could get messier.
bcritchley@nationalpost.com
https://www.financialpost.com/news/Things+still+messy+Unique+Broadband/4363633/story.html
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It's very good to see the regulators are not only watching but getting involved.
Hopefully it is more than just "theater" on their behalf and that they really have some teeth.
Who knows, this might turn out to be "the" case for catalyzing securities reform in Canada.
In which case we'll never hear the end of it from the village id#ot.
Guess I can live with that if indeed it happens.
Perhaps this also explains the delay in filing the NRs.
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PS. Can't wait for the village id#ot to acknowledge his status, LOL.