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Local money manager settles proxy fight, wins board seat

September 23, 2014

Carmel money manager Jonathan Evans has won a partial victory in his quest to overhaul the management and board of Rand Logistics Inc., an underperforming Great Lakes shipper.

On Monday afternoon, a day before Evans’ proxy contest was to come to a head with a shareholder vote at the company’s annual meeting in Manhattan, Rand agreed to bring him onto the board and to demote Laurence Levy from executive chairman to executive vice chairman.

Meanwhile, board member Michael Lundin will become chairman and President Ed Levy (no relation to Laurence) will become CEO—both moves that Evans, the 45-year-old chief investment officer at Carmel’s JWEST LLC, had championed.

JWEST, which owns an 8-percent stake in Rand worth $9.2 million, has for months tried to lay the groundwork to jettison Laurence Levy, a Manhattan financier who has amassed millions of dollars in compensation even as Rand Logistics faltered.

Since going public in 2004 at $6 a share, about where it now trades, Rand has had a litany of stumbles, from mechanical problems that sidelined ships to repeatedly missed earnings expectations.

Evans and O’Connor, 53—the managing member of JWEST and a founder of the Carmel CPA firm Dauby O’Connor & Zaleski—both had been campaigning for weeks to win election to the six-member board. Under the settlement, O’Connor is stepping aside and won’t be joining the panel.

Evans declined to discuss why JWEST agreed to accept one board seat rather than two.

“We at JWEST LLC are appreciative that Rand’s board has listened to its stockholders and decided to implement changes to strengthen its corporate governance and enhance long-term stockholder value,” Evans said in a press release issued by Rand.

JWEST’s campaign received a huge boost earlier this month when the influential shareholder-advisory service ISS backed the Carmel firm’s calls for reforms.

“In light of the dissidents’ compelling case for change and the strong alignment of the dissident nominees’ skills and experiences with the challenges this board currently faces, support for dissident nominee Evans is warranted,” ISS said in its report.

While recommending shareholders vote for Evans, ISS said they should withhold their votes for O’Connor.

“While dissident nominee O'Connor appears to have a useful background for a board, and might be a good director candidate generally, his public accounting experience and focus on real estate appears to be less directly relevant to the company's challenges than the experience” of Evans or current board member John Binion, who JWEST sought to unseat.

Under the settlement, Binion will remain on the board, but Rand agreed to add another independent director within three months.

The settlement also requires Rand to eliminate a conflict of interest that Evans had criticized during the proxy contest—Rand’s leasing of the office space used by Laurence Levy from Levy’s own private equity firm. Rand’s press release said that arrangement will not be renewed when it expires in February 2016.

The press release quoted Laurence Levy as saying “JWEST is a significant stockholder, and we value its opinions and perspective.”

Before the settlement, JWEST and Levy had been far less cordial.

After Levy, who operates from the 50th floor of a Fifth Avenue skyscraper, filed a presentation with the Securities and Exchange Commission casting Rand’s performance in a positive light, Evans fired back with his own sharply worded missive.
 
“You once again have done a fine job of spinning a struggling company in a way that appears very positive,” Evans wrote to the Levy-led board. “However, your smoke and mirrors approach is fooling nobody, as evidenced by Rand Logistics’ stock price.”

 

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