The saga of former Children's Place (NASDAQ: PLCE) CEO Ezra Dabah's battle to acquire the company just keeps getting weirder.Dabah, who "resigned at the request of the board of directors" (file under: How many words can we use to say "fired") back in September over violations of the company's code of ethics, said in an in amended 13-D filing yesterday:
On February 19, 2008, the Company announced that its 2008 annual meeting of stockholders is scheduled to take place on June 27, 2008. An annual meeting of stockholders has not been held by the Company since June 22, 2006, a period of over 18 months. The Reporting Persons believe that there is no reason to delay the annual meeting for another four months. Accordingly, on February 21, 2008, Ezra Dabah filed a complaint (the "Complaint") in the Court of Chancery for the State of Delaware (the "Chancery Court") requesting that the Chancery Court order the Company to hold the annual meeting within 45 days from the filing of the Complaint.
That's right: the CEO who owns 17% of the stock and was essentially fired over violations of the company's code of ethics is suing for the company to hold a shareholder meeting. In the same filing, Dabah reiterated his belief that he will be able to make an offer to acquire the company for $24 per share in cash.
Here's what makes this case interesting. As recently as June, shares of Children's Place were trading at more $50. Since that time, accounting woes, corporate governance concerns, and management turmoil have contributed to a decline of more than 50% in the value of the stock. Now the former CEO who was a major contributor to those woes is looking to swoop in and take the company private, presumably so he can earn a strong return by buying at a depressed share price.
But the share price is depressed in large part because of him! I guess sometimes you really do create your own luck.
Here's what makes this case interesting. As recently as June, shares of Children's Place were trading at more $50. Since that time, accounting woes, corporate governance concerns, and management turmoil have contributed to a decline of more than 50% in the value of the stock. Now the former CEO who was a major contributor to those woes is looking to swoop in and take the company private, presumably so he can earn a strong return by buying at a depressed share price.
But the share price is depressed in large part because of him! I guess sometimes you really do create your own luck.
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