Premier Exhibitions Inc.’s biggest shareholder has threatened the Atlanta entertainment company with a proxy battle if its Chairman and CEO won’t step down and its board of directors isn’t revamped.
Chicago-based Sellers Capital LLC is the largest shareholder of Premier Exhibitions (NASDAQ: PRXI) with 4,778,399 shares of common stock, or about 16 percent of the company’s outstanding shares. Premier Exhibitions produces the controversial "Bodies... The Exhibition" tour and Titanic exhibitions.
Sellers has called for the resignation of Premier Exhibitions Chairman and CEO Arnie Geller, alleging management failures and a lack of strategic focus. It also cited a 95 percent decline in Premier's stock price since mid-2007.
In a letter to Geller on Nov. 4, 2008, Sellers also took issue with Geller's compensation. In fiscal year 2008, Geller got a $676,000 salary and total compensation of $1.26 million, including a cash bonus of $300,000. That same year, Premier's stock price fell 55 percent.
The stock has sunk 95 percent from its all-time high price of $18.62 in July 2007 and was down 91 percent for the year-to-date in 2008 through Nov. 4, Sellers noted.
Sellers also alleged as problems declining cash balance and liquidity; bloated organizational structure; no clear plan to monetize the company's Titanic assets currently tied up in litigation and a continued failure to resolve the legal dispute; nepotism; and a stock price just above $1, risking a NASDAQ delisting.
Sellers said it wants to add to the board directors with restructuring/ turnaround experience and entertainment industry experience.
Sellers Managing Partner Mark Sellers would serve as non-executive chairman after Geller's departure and would oversee implementation of the plan. Sellers would not receive compensation of any kind.
If the company does not agree to the changes, Sellers said it will call for the company to hold a special meeting of all shareholders in order to vote on specific proposals to address its concerns, including a proposal to elect its slate of nominees.
