Casey Capital takes Essex Rental management to task
Casey Capital owns 5.9% of Essex Rental. Here are the highlights of its letter from today about troubling actions on behalf of Essex management.
1. Promptly after Lawrence Levy engaged with us to negotiate a resolution to the proxy contest, Essex told stockholders to disregard our proxy materials. At approximately 9 a.m. on May 12, 2015 Essex filed with the SEC a letter addressed to us asking us to engage in discussion regarding settling the differences between our group and Essex. This letter from Essex contained an offer to appoint Lee Keddie and John Climaco to the board after the annual meeting so that they would constitute two of the board's seven members. Since we were very much open to reaching a settlement, we responded to Essex less than thirty minutes after that letter was filed. We followed up our response by arranging a call at a time that was convenient for Laurence Levy that very same evening. The call that took place that evening was very cordial and we felt optimistic that a settlement could be reached after working out all the details of the needed cost-cutting program and the details of the needed improvement to corporate governance. To our surprise and dismay, early on the morning of May 14, 2015, Essex filed an additional definitive proxy statement that told shareholders that Essex would not be counting votes cast for our nominees at the annual meeting, that we have failed to comply with Essex'sBylaws, that our nomination notice is invalid, and that our proxy materials, including our own proxy card, should be disregarded. We believe that many Essex stockholders are as shocked and disappointed by this stunt as we are. Some Essex shareholders may regard this as "voter suppression" with Essex attempting to persuade shareholders to not even bother to vote.
2. Lawrence Levy repeatedly states that Essex plans to disregard all the shareholder votes for our nominees. Essex maintains that Lee Keddie's nomination notice fails to comply with the Bylaws because Lee Keddie is not identified on the stock ledger maintained by Essex's transfer agent, Continental Stock Transfer and Trust Company. Essex claims that only stockholders who appear on Continental's stock ledger are entitled to vote at the meeting and make nominations. We have told Essex several times, including in our public filings with the SEC, that Lee Keddie is in fact identified on Continental's records as stockholders. Lee Keddie holds a written statement of direct registration issued by Continental and dated March 25, 2015 as evidence that he is on the stock ledger. We have provided a copy of this statement of direct registration to Essex. Essex continues to make misleading statements to stockholders on this issue. Essex's own transfer agent's records directly support this fact. Essex's own transfer agent's records directly contradictLawrence Levy's statements.
3. Essex appears intent on ballooning the expenses of this proxy contest. Essex is apparently ignoring the stock ownership records of its own transfer agent. Essex is claiming that Mr. Keddie is not on the stock ledger and therefore not entitled to make nominations at the annual meeting. Essex is saying that Essex will refuse to count the votes that shareholders cast for our slate. If indeed Essex refuses to count the votes that shareholders cast for our slate, our only recourse will be in the Delaware courts, an expensive and unpleasant prospect.