Given another chance to win the hearts and minds of its shareholders, Baltimore Bancorp has issued a proxy statement saying management has heard their voices and is listening.
That message, the main theme of a proxy statement sent to shareholders last weekend, comes as management is gearing up for the second round of a proxy fight against dissidents headed by Edwin F. Hale Sr.
Hale owns shipping and trucking companies as well as the Baltimore Blast, a professional indoor soccer team.
On Aug. 29, shareholders of the fifth largest banking operation in the state will vote on whether to expand the company's board from 18 to 28 directors. If the measure is approved, 10 Hale allies will take seats and the dissidents will have a majority of the board.
Hale's proxy statement is scheduled to be issued soon.
The proxy fight for control of Baltimore Bancorp, the parent of the Bank of Baltimore, began in early May. In a proxy fight, dissidents try to persuade shareholders to vote shares in favor of candidates for the board. If successful, the dissidents gain control of the company.
The Hale group succeeded in getting six of its members on the 18-member Baltimore Bancorp board in voting at the company's annual meeting in May. But a court ordered a new election on the issue of expanding the board because of disputes over how the votes were counted.
The two sides have had meetings since then to try to settle the conflict before the next vote. But they have not been able to agree on who will be chairman. "They don't want me to assume the chairmanship and we don't want [Robert F.] Comstock," said Hale. "That is the issue," he said.
Following the May vote, the board of directors removed Harry L. Robinson as chairman and chief executive officer and installed Comstock in his place. The board also set up a committee to actively look for potential buyers of the bank holding company.
In compliance with the votes at the annual meeting, the board also eliminated the company's "poison pill" defense to a hostile takeover and began a stockholders' advisory committee.
"We've taken each of these actions either because a majority of you voted in favor of it at the annual meeting or because a significant number of you told us in other ways that you wished us to do so," the Baltimore Bancorp proxy statement said. The statement also asked: "If the Hale group takes control of the board, will they be as responsive to your interests?"
Echoing charges from the previous fight, the proxy statement attacked the experience of the Hale group, saying that none of its members has ever been a director of a publicly owned bank. It also said the group does not have a specific operating plan for the bank.
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.