Consolidated-Tomoka Land Co. in a Jan. 30 letter dismissed Wintergreen Advisers LLC's claims regarding proposed director nominations to the company's board as having no legal merit.
The company said Wintergreen had asserted in a Jan. 23 letter that it was entitled to submit shareholder proposals as a beneficial owner of Consolidated-Tomoka shares.
Consolidated-Tomoka, however, said its bylaws require record ownership, not just beneficial ownership, for director nominations. Given that Wintergreen is not a shareholder of record of Consolidated-Tomoka, the company deemed Wintergreen to be not eligible to nominate directors for election at its annual meeting.
The company also argued that its board, half of whom were appointed in consultation with Wintergreen, see the shareholder as merely wanting a quick sale or liquidation of Consolidated-Tomoka "to satisfy its own need for liquidity in its CTO shares."
"The board believes that it would be inconsistent with its duty to all shareholders to make an exception to the company's bylaws for a shareholder that seeks to take the company in a direction that would be damaging to other shareholders. A liquidation of CTO would likely result in significant value destruction for shareholders due to significant tax costs," Consolidated-Tomoka said in a statement.
Consolidated-Tomoka reiterated that its board's independent committee that was charged with reviewing strategic options, together with Deutsche Bank as independent financial adviser, had resolved that the company stay the course on its business plan after receiving only two sale proposals, neither of which was acceptable.
Nonetheless, the company noted that it is still "open to constructive engagement" with Wintergreen regarding a solution that is beneficial to all stockholders.