New chairman seeks to end bitter proxy fight

July 11, 1991|By Ross Hetrick | Ross Hetrick,Evening Sun Staff

Robert F. Comstock, the new chairman and chief executive officer of Baltimore Bancorp, has one overriding objective -- bringing an end to the bitter and distracting proxy battle that has engulfed the bank.

"All it does is hurt the shareholders," he said in a recent interview. "The longer this thing goes on, it hurts the operations of the bank." Baltimore Bancorp is the parent of the Bank of Baltimore.

Comstock, 55, was thrust into the middle of one of most acrimonious struggles in Baltimore business history June 27 when he replaced Harry L. Robinson as head of the state's fifth largest banking operation. Robinson, who was chairman and chief executive officer for more than six years, was voted out by the board of directors.

Comstock, who has been a Baltimore Bancorp director since 1988, brings to the job a reserved personality and a prodigious appetite for work. He is known as a good listener and a person who leads by consensus.

A partner in a small Washington law firm that specializes in business law, Comstock has banking experience that includes the creation of one commercial bank and the chairmanship of a Washington area thrift.

Comstock was chairman and chief executive officer of Metropolitan Holding

Co., the parent of Metropolitan Federal Savings and Loan of Bethesda, from 1985 to 1987, when it was sold to Baltimore Bancorp. He was chairman and chief executive officer of First Continental Bank in Silver Spring from 1983 to 1986.

Baltimore Bancorp became the target of a proxy fight in early May when a group of dissidents, headed by Edwin F. Hale Sr., launched its takeover effort.

In a proxy fight, a group of dissidents tries to persuade shareholders to vote their shares in favor of their candidates for the board. If successful, the dissidents gain control of the company.

The Hale group has succeeded in getting six of its members on the 18-member Baltimore Bancorp board. A case is pending in the 4th U.S. Circuit Court of Appeals that could put another 10 dissidents on the board, if the court should decide in Hale's favor. That decision is expected in about a week.

That court case is an appeal to a decision by U.S. District Judge J. Frederick Motz, who ordered that a new vote be held to determine whether the extra 10 seats should be added to the bank holding company's board.

If a negotiated settlement is possible, Comstock is the person to get it, according to longtime associates. "I think he is very knowledgeable and he tends to be very conciliatory," said Joel S. Meisel, the general partner of the Rockville real estate development firm of Meisel & Cohen Properties.

Meisel, who served on two boards with Comstock, said he never heard Comstock raise his voice. "When he was chairman of the board, he did things on a consensus basis," he said. Comstock is also one of the "most honorable and forthright persons" he has met, Meisel said. "I think more highly of him than 99 percent of the people I know," he said.

Comstock gets high marks from James T. Reilly, Comstock's law partner in the firm of Interdonato, Reilly & Comstock and his former basketball coach at Catholic University in Washington.

"He has a marvelous temperment of meshing with people without being provocative," Reilly said. "He does well with people in a quiet way."

Reilly first meet Comstock in 1958 when he was a part-time basketball coach at Catholic University and Comstock was trying out for the team. Comstock, who was on an academic scholarship to the school, had waited until he was senior to try out.

Because of his late start, Reilly told Comstock that he would have be in the top seven of the 14-man team, or he would be cut. Comstock came in fifth. "He is exceptionally competitive in a quiet way, not in an obnoxious way," Reilly said.

The success of the Hale group stems from the simmering stockholder resentment over Baltimore Bancorp's rejection last year of a $217 million offer for the bank from First Maryland Bancorp, the second largest banking operation in the state and the parent of First National Bank of Maryland.

The shareholders were particularly incensed by Robinson's statement at the 1990 annual meeting that the bank "was not for sale." The stockholders were little placated by Robinson's later explantion that he only meant to say the bank was not actively seeking offers.

On being elected chairman, Comstock unveiled a new approach by announcing that a three-director committee would investigate the possibility of selling the bank. "We're going to explore what is out there," Comstock explained recently.

While Comstock wants to settle the proxy battle outside of court, he expects he will have to wait until after the court decision. "I think the dissidents are not in a mood to try to negotiate any type of settlement to this matter because they feel they are going to win that case," he said. "Our attorneys, obviously, feel the opposite."

Despite his desire for a settlement, Comstock is not willing to throw in the towel and concede control to the Hale group. "I guess there is concern because of the lack of banking experience in the group," he said. "Obviously, Buck Whittum has experience, but beyond that, there is not a lot of banking experience."

Charles H. Whittum Jr., Hale's proposed chief executive officer, is a retired executive from Signet Bank and its Maryland predecessor, Union Trust Bank.

Yet, Comstock is optimistic that a settlement can be reached with the dissidents. "I think all of them have the best interests of the bank at heart. I hope so," he said. "If that is the case, we shouldn't really have any real problems."

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