Levitt investor apologizes to Office Depot for proxy contest expense

By Lisa Kerner

Charlotte, N.C., April 30 - Levitt Corp. investor Phil Frohlich of Prescott Group Capital Management LLC apologized to Office Depot, Inc. for having to spend money to fight Levitt's recent proxy contest.

In an April 25 letter to Office Depot chairman and chief executive officer Steven Odland, Frohlich described Levitt chairman Alan Levan's efforts as "a frustrated executive's feeble attempt to focus attention away from his miserable performance."

"The whole concept of attempting an expensive proxy fight (with Levitt shareholders' money) when you only hold a mere 1.2% of any company's shares outstanding, should be an excellent clue that Mr. Levan's judgment is significantly impaired," Frohlich said in his letter.

The letter was included in a schedule 13D filing with the Securities and Exchange Commission.

Frohlich said that at Levitt's most recent shareholder vote, 78% of all shareholders unrelated to Levan voted against his plan for "a massively dilutive rights offering."

Levan clings to power using his dual classes of stock, giving him the ability to run Levitt "like his own little fiefdom although economically he is not even its largest shareholder," Frohlich said.

Frohlich beneficially owns 6,229,124 shares, or 6.6 %, of Levitt, a homebuilding and real estate development company based in Fort Lauderdale, Fla.

In March, Office Depot urged its stockholders to reject an attempt by Levitt and its subsidiary Woodbridge Equity Fund LLLP (together, the Woodbridge Group) to nominate two dissident directors to the company's board at the annual meeting on April 23.

According to an Office Depot news release, the Woodbridge Group wanted to oust Odland as well as former chairman and CEO David I. Fuente, replacing them with Mark Begelman, Office Depot's former president and chief operating officer, and Martin Hanaka, former CEO of Sports Authority, Inc.

Office Depot, in a prior news release, said that both Begelman and Hanaka were considered and rejected for executive positions with the company.

It was previously reported that the Delaware Court of Chancery ruled that Office Depot cannot prevent Woodbridge Group from nominating directors for election to the company's board before the 2008 annual meeting.

The court denied Office Depot's cross-motion for judgment seeking a contrary declaration.

Office Depot is a Delray Beach, Fla.-based provider of office products and services.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.