Orthofix questions qualifications of Ramius director nominees

By Lisa Kerner

Charlotte, N.C., Feb. 9 - Orthofix International NV questioned Ramius LLC's recent nomination of Steven J. Lee for election to the company's board of directors.

Lee, founder of PolyMedica Corp., left the medical products company in 2002 following a Medicare fraud investigation by the Department of Justice, Orthofix said in a letter to Ramius.

PolyMedica paid a $35 million settlement to the U.S. government to resolve civil litigation in 2004 after Lee left the company, according to Orthofix.

Orthofix also cited the government's investigation of PolyMedica's Florida-based subsidiaries and two whistleblower lawsuits filed against PolyMedica alleging violation of the False Claims Act.

Lee is currently president of SL Consultant Inc., a private investment firm and hedge fund.

Orthofix previously questioned Ramius' nomination of Peter Feld, a 29-year-old Ramius employee "with no health care experience and a strikingly thin (and disconcerting) record of service on just two boards."

Feld was a member of the board of Sharper Image Corp., which filed for bankruptcy shortly after Feld's departure. He was also a member of the board of CPI Corp., which was recently threatened with delisting by the New York Stock Exchange, Orthofix said.

"Frankly, the board is deeply troubled by the respective backgrounds of both Mr. Lee and Mr. Feld, as well as Ramius's efforts to impose these two people on our team, our culture and our organization," Orthofix said in the letter, which was included in a company news release.

Orthofix chairman James F. Gero said the board is prepared to formally meet and interview the other two Ramius candidates, Charles T. Orsatti and J. Michael Egan.

Orsatti is managing partner of Fairfield Capital Partners, Inc., a private equity fund. Egan is chief executive officer of Steadman Hawkins Research Foundation, an orthopedic research organization.

On Jan. 29, Orthofix announced that Ramius delivered shares representing about 55% of its outstanding stock in support of a special general meeting of shareholders for the purpose of making changes to the company's board.

Ramius, a 5.3% shareholder, is attempting to remove from the Orthofix board Gero, Peter Hewet, Alan Milinazzo and Walter P. von Wartburg, it was previously reported.

Orthofix is a Curacao, the Netherlands Antilles-based diversified orthopedic products company.

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