The battle over who will control Baltimore Bancorp, the parent company of the Bank of Baltimore, moved a step closer to resolution today as balloting ended for shareholders even as the contesting parties continued their war of words.
Meeting at the Sheraton Inner Harbor Hotel this morning, shareholders voted whether to enlarge the bank holding company's board from 18 to 28 positions.
Such a move would hand over control of Baltimore Bancorp to a group of 16 dissident shareholders led by Edwin F. Hale Sr., a Baltimore truck and shipping business owner who also owns the Baltimore Blast, a professional indoor soccer team.
Voting against the measure would effectively leave the bank in the current management's hands.
An official tally -- compiled by the Corporation Trust Co., an independent corporate election inspection team -- is not expected for a week.
But after the meeting, Hale and Robert F. Comstock, Baltimore Bancorp's chairman and chief executive officer, both predicted victory.
Hale said that prior to the meeting there was a "flurry of activity" among shareholders in his favor. Comstock, however, said he was not aware of such activity.
Today's meeting was attended by about 200 shareholders and the company's board of directors. It gave many a last opportunity to state positions in the long-running fued, which has resulted in one contested election, a court case and the firing of ++ the bank's previous chairman and chief executive officer.
Comstock, who took over from former bank Chairman Harry L. Robinson, told shareholders today that the Hale group was "dealing in generalities" and had "no specific plan" for the bank's future.
By contrast, he said, he has begun to institute most of the measures owners of the bank wanted, including being more responsive to shareholders and actively pursuing a potential
buyer for the bank.
"We know that the shareholders were deeply dissatisfied and wanted a change in direction," Comstock said. "The current board is doing exactly what you said you wanted done."
Also speaking, Hale attempted to assure shareholders that "your investments will be watched closely" if his group is allowed to takeover the bank's management.
Hale also attempted to remind shareholders that if his group had not emerged to fight the bank's management, "they would have drifted along, business as usual."
He also revealed that if the 16 dissidents prevailed, he would move to unseat the eleven board members that are currently backed by the bank's management.
Later, Comstock called Hale's threat "totally out of line."
"Those people were elected to three-year terms," Comstock said, referring to the eleven board members, adding that the dissidents clearly "want a total Hale-dominated board."
Several shareholders who spoke today appeared to feel little allegiance toward either group. Many expressed dissatisfaction with both sides and deplored any move to sell the bank.
"I don't want the bank sold," said one shareholder. "I do want to see less greed. I do want to see less cronyism."
Later the shareholder, who asked not to be identified, said she would vote in favor of the current management, who she said had received "a pretty big shock" and appeared to be reformed.
A final tally would close one chapter on the Baltimore Bancorp saga, while perhaps opening others.
The proxy fight already has taken a toll on Baltimore Bancorp's bottom line.
In its second-quarter report, the bank holding company reported that it has spent $1.3 million on the fight, helping to push down its earnings by 44 percent during that quarter. The bank expects to spend another $300,000 to $500,000 in the current effort, pushing its total tab as high as $1.8 million.
The dissidents' expenses, which are being paid solely by Hale, could go as high as $1.25 million. Should the Hale group be successful, the new directors would be expected to vote to have the bank pay the expenses, pushing to more than $3 million the total expense to the bank.
If the dissidents fail in the vote, Hale stands to lose up to $1.25 million -- the equivalent of the annual net income for all of his operations. Hale dismissed the idea that this would put a strain on his operations. "My net worth is significant to take care of it and it is significant to take care of any obligation," Hale said recently.
Hale has significant obligations besides the expense of the proxy fight.
As a result of his divorce in 1988, he has to pay $136,250 each year to his ex-wife. Just recently Hale said he paid a judgment of $127,109 in connection with a failed truck plaza effort where he was a limited partner.
Hale confirmed that his two tugs that had been used in his Hale Container Line operation are laid up waiting for repair. Also, his corporate airplane is grounded, in need of repair. Hale said the barge service, which carries cargo between ports, is now chartering tugs from other companies.