ISS Recommends Stockholders Vote For The Election Of Atlas And Blue Wolf Nominees To Verso's Board And Delaware Court Orders Verso To Produce Info
Tuesday, January 21, 2020 2:15 pm
GREENWICH, Conn. and NEW YORK (News release) -- Lapetus Capital II LLC (together with its affiliates, "Atlas"), along with other participants in its solicitation, including BW Coated LLC (together with its affiliates, "Blue Wolf"), the beneficial owner of approximately 9.43% of the outstanding common stock in Verso Corporation (NYSE: VRS, the "Company" or "Verso"), today announced that Institutional Shareholder Services Inc. ("ISS"), a leading proxy advisory firm advising institutional investors on voting matters, has recommended that stockholders vote on the BLUE proxy card in support of Atlas' and Blue Wolf's nominees, Sean Erwin and Jeffrey Kirt. In addition, Atlas and Blue Wolf announced the Delaware Chancery Court found that Atlas presented facts sufficient to establish a credible basis for the Court to infer that there may have been entrenchment motives and possible wrongdoing affecting the strategic review process that led to the Pixelle transaction. ISS Recommendation In its report recommending stockholder vote on the BLUE proxy card in support of Atlas' and Blue Wolf's nominees, Sean Erwin and Jeffrey Kirt, ISS highlighted a history of questionable governance by the board of directors of Verso (the "Board"), including the following:
ISS also commented on Verso's inadequate disclosure and questionable capital allocation:
Commenting on the relevant skills and many qualifications of Atlas' and Blue Wolf's nominees, ISS said:
Finally, commenting on Verso's proposal to ratify its recently adopted poison pill, ISS said:
Commenting on the ISS recommendations, Tim Fazio, Managing Partner of Atlas, said, "We are gratified that ISS has recognized the many governance shortcomings of the Board and has supported our case for change by recommending the election of Sean Erwin and Jeffrey Kirt. We urge stockholders to also vote for Timothy Lowe, who holds 'highly relevant skills and experience,' as acknowledged by ISS." Commenting further, Mr. Fazio said, "In our view, the addition of these three independent voices is crucial to foster change and unlock value at Verso. We are confident our three highly-qualified, independent nominees will leverage their industry and operating experience to promote the development and implementation of a viable long-term strategy to operate and reposition the business." Delaware Chancery Court Ruling On January 17, 2020, the Delaware Court of Chancery found that Atlas presented facts sufficient to establish a credible basis for the Court to infer that there may have been entrenchment motives and possible wrongdoing affecting the strategic review process that led to the Pixelle transaction. The Court found a few facts most compelling, including that the compensation of the Verso directors as an incentive to stay in office was "a logical point." Accordingly, the court ordered Verso to produce certain information previously sought by Atlas in its lawsuit to investigate whether the Board engaged in wrongdoing related to the strategic review process.
|