Chap-Cap Activist Partners and affiliates say eSpeed's CEO failing to perform

By Lisa Kerner

Charlotte, N.C., March 14 - eSpeed Inc. investors led by Chap-Cap Activist Partners Master Fund, Ltd. and Chapman Capital LLC informed the company's chief executive officer Howard Lutnick "(via one of his gatekeepers) its strong assertion that, given Mr. Lutnick's demonstrated failure to perform in his capacity as CEO," eSpeed should hold a full-scale auction.

The investor's comments were included in a schedule 13D filing with the Securities and Exchange Commission. Specifically, Chap-Cap cited eSpeed's underperforming common stock and plummeting earnings projections.

Chap-Cap beneficially owns 1,839,593 shares, or 6.2%, of the New York trading technology company's stock.

Robert Chapman, managing partner, noted that Lutnick failed to make himself available to a sellside firm's analyst. He believes that "Mr. Lutnick's vexing behavioral patterns" are due to the fact "that approximately 88% of the issuer's voting power is controlled by Mr. Lutnick or affiliated parties."

The investor and its affiliates said they believe it is the fiduciary duty of eSpeed's board "to compel the conversion of all class B common shares into class A common stock," according to the filing.

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