Critic gets H&R; Block board seat

H&R; Block Inc. shareholders elected hedge fund manager Richard Breeden to the board, putting more pressure on the company to shut its sub-prime mortgage unit and sell others not tied to the business of preparing tax returns.

Breeden, a former chairman of the Securities and Exchange Commission, and two of his candidates won a majority of the vote Thursday. Results were released at the annual meeting in Kansas City, Mo., where H&R; Block, the nation’s biggest tax-preparation company, is based. The board has 11 members.

Breeden has pressed Chief Executive Mark Ernst to close money-losing Option One Mortgage Corp., rather than waiting to complete a sale that may take until the end of this year. Although Cerberus Capital Management has agreed to buy Option One, prospects for the sale have dimmed as sub-prime defaults rose and deals for rival lenders including Accredited Home Lenders Holding Co. collapsed.

“The focus of the management has been off for many years,” Breeden said after the meeting. “ When you have so many different businesses, you can’t focus. You have to have your priorities.”

Breeden, who owns about 2% of H&R; Block’s shares, reiterated his criticism of Ernst’s handling of the sale saying the CEO started the process too late.

Breeden said dealing with Option One would be the first item of business when he sits with the board.

H&R; Block fell 4 cents to $19.99. The stock has declined about 13% this year.