Activist investor Joseph Stilwell took his feud with the management and board of HopFed Bancorp Inc. up a notch, claiming that President and CEO John Peck offered him "greenmail" twice when offering to meet with him.
Stilwell has called for Peck's resignation several times, citing the poor performance of the Hopkinsville, Ky.-based company and his "bloated compensation package." The board recently responded with a letter supporting the executive, and claimed that Stilwell and his representatives repeatedly refused requests for meetings where his concerns could be discussed and addressed.
In his letter attached to a Schedule 13D filed Jan. 27, Stilwell said the board was "misinformed," as "[W]e've been offered 'greenmail' by Mr. Peck twice — which is once more than were used to — and we found that distasteful, nay, offensive. [General Partner Megan Parisi] was trying to avoid another meeting where Mr. Peck offered us 'greenmail' again."
The Stilwell Group did not immediately respond to S&P Global Market Intelligence's request for comment on the matter.
Peck said in an interview that he "did not understand" what Stilwell meant by "greenmail," saying, "How could he know the content of the meeting even before meeting with us?" He also said that he was both "surprised and disappointed" by the multiple rejections to hash out the activist investor's concerns.
Peck also told S&P Global Market Intelligence that he did not take Stilwell's statements personally, as these were characteristic of the activist investor and were similar to the same "disrespect" he has shown executives of other companies he has investments in. He also said that he appreciates the public support given by the board, and deferred to them regarding any response to Stilwell's latest claims.
Among those claims was that the company was under "bad management."
"I've seen how hundreds of banks are managed. I know what good management looks like, and I know what bad management looks like. Yours looks like bad management," Stilwell wrote.
He also urged the board — headed by Chairman Harry Dempsey — to "[p]ay some attention to what's going on" at HopFed, and chided them for equating shareholder value with the company's asset size.
Stilwell also included an excerpt from a letter he claimed he received from someone from "mid-level management" at the company which said that "For him to be CEO of a company of this size, one that is publicly traded, is an atrocity. So your remarks about his being a 'liar and incompetent' are right on target." Another letter from a different employee, he added, claims that employees were tired of the "constant draining" Peck was doing to the bank.