ARV Annual Meeting Stalled Amid Dispute
ARV Assisted Living LLC said Thursday it adjourned its annual meeting this week for lack of a quorum--a rare event in the corporate world.
The move reflects the legal tensions between the Costa Mesa operator of homes for the elderly and its largest shareholder.
A real estate investment affiliate of the New York investment house Lazard Freres & Co., a unit that holds a 47.9% stake in ARV, didn’t vote its shares at the meeting Wednesday morning. When only 48.8% of the company’s shares were voted, ARV adjourned the meeting until June 19 and said it is keeping the polls open until then.
ARV and Lazard are in a legal dispute over expansion plans. On May 14, ARV filed suit after Lazard acquired Kapson Senior Quarters Corp., alleging that the investment firm was using Kapson to move into the assisted-living market, leaving ARV behind.
ARV also said that in April, Kapson moved to buy Louisville, Ky.-based Atria Communities Inc. for $750 million without ARV’s approval. ARV says the investment company and its affiliates can’t make the purchase without getting consent of 75% of ARV’s board members.
The Lazard Freres real estate affiliate says the lawsuit lacks merit and misrepresents its contract with ARV, and that the firm will vigorously defend itself. Its spokesman, Owen Blicksilver, said Thursday that the company decided not to participate in the annual meeting to avoid being “disruptive.”
He said the company is “keeping its options open in light of the litigation.” He said the company will vote at the “appropriate time,” but declined to elaborate.
In a press release, ARV said the Lazard Freres real estate affiliate was “contractually bound” to vote its shares at the annual meeting. Blicksilver said the investment company disagrees.
The only business on the agenda at the annual meeting was reelection of three incumbent directors--an item that’s been continued until June 19. One of the three is Robert P. Freeman, a director representing Lazard Freres.
Freeman and two other Lazard Freres directors--Kenneth M. Jacobs and Murry N. Gunty--didn’t show up for the annual meeting. However, the three participated by phone at the board meeting immediately after the shareholders’ meeting, ARV official said.
In the press release, Howard Phanstiel, ARV’s chairman and chief executive, said, “By forcing the company to adjourn its annual meeting and incur additional expenses to hold another meeting, (Lazard Freres) and their three director nominees to our board continue to demonstrate their utter disregard for their fiduciary and contractual obligations to ARV’s shareholders.”
Suzanne C. Shirley, ARV’s spokeswoman, said ARV wasn’t notified until the night before the meeting that the Lazard Freres real estate affiliate wouldn’t be participating. The company decided it was too late to call off the meeting.
“You’ve reserved a room. You’ve got coffee and danish. You’ve got some very nice supportive shareholders who stop in,” she said.
She said about half a dozen shareholders showed up, asked a few questions about the company’s plans, and got to meet the CEO.
