The tussle between Baltimore Bancorp and its six newly elected directors heated up yesterday when the dissidents asked the Federal Reserve and the Federal Deposit Insurance Corp. to force the company to disclose non-public information to the new board members and to remove the company's incumbent management if it refuses to do so.
"If there are undisclosed problems and they are material to regulatory and/or investment decisions, they must be disclosed to regulators and/or the public immediately," wrote Kimberly Hill Hoover, a lawyer representing shareholders led by Baltimore Blast owner Edwin F. Hale Sr.
"It just sounds to me like continuing bickering back and forth between the lawyers," said Jerome P. Baroch, executive vice president of Baltimore Bancorp, which is the parent of the Bank of Baltimore. "We've talked about our position with Mr. Hale . . . numerous times."
Baltimore Bancorp has been rocked in recent months by a proxy hTC contest between incumbent management and shareholders led by Mr. Hale who have criticized the bank's performance and sought to gain a majority of the board of directors.
The Hale slate swept the six seats on the company's 18-member board of directors that were up for election in May. They also won an apparent majority for a proposal to expand the board of directors to 28 members, which would let the dissidents capture the 10 new seats and gain control of the board.
But management challenged more than 1 million votes on the proposal to expand the board, prompting a federal judge to order a new election on that issue in August. Yesterday's letters to the Fed and the FDIC grew out of demands last month by the new directors for detailed information about the company's loan portfolio, its business plans and the fees management has paid its lawyers during the protracted proxy fight, among other things.
The new directors say that they need the information to do their jobs.
Management has refused to provide the information, saying that the dissidents would use it for political purposes during the proxy fight.
Management has refused to give the dissidents what they want until they sign a confidentiality agreement, which Dennis Gingold, a lawyer for the Hale slate, said would bar any director from telling regulators or the public about any material problem unless a majority of the board agreed to disclose it.