A recap from Jaysenese of the Shareholders Meeting - 7/5/2013
Jay attended the shareholders meeting in person.
I asked, and he gave me permission to bring this to iHub, thanks Jay...
He writes:
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GOOD: Everybody was there: MW, Chad Smith, CFO Tim Yeager, Excecutive VP Peter Struck, Outside Counsel R. Jeffrey Byrd. All board of directors.
FEW or NO HEDGE FUNDS SPOTTED.
25-30 shareholders. Fully 15-20 were very very old NYC seniors who were confused in their questions.
Voting was pre-ordained: all recommended items passed. There was a 7-minute break for last minute voting to take place. It was all very organized, but everyone already 'knew' the outcome. Meeting adjourned, then was followed by Mike's comments, then was followed by shareholder questions. Shareholders limited to 2 questions. No audio / video allowed in the meeting.
Board Member Tim Graham's phone went off early in the meeting and he had trouble turning it off. He spent most of the meeting turning around to see what shareholder was asking the stupid question.
Boad Member Diane Glossman and Steven Scheiwe stared straight ahead the entire time.
Board Members Michale Renoff and Mark Holliday (the two youngest?) seemd most interested in what was going on.
Eugene Davis? Ahh, more on him later!
The questions were a train wreck. Every stupid question we've ever asked was repeated. Some were confused questions that seemed to get WAMU / WMILT / WMIH confused. The question, over and over and over, was WHAT were the companies plans. MW handled the questions OK at best, probably not very well. He was clearly irritated. He kept looking out toward the BOD as if seeking guidance or approval on how or what he could say. Chad Smith sat at his right and handed MW papers at times.
In very general terms, though the question was asked many different ways: MW is willing to say nothing about the company's plans for the future. The senior shareholders were flabbergasted at his 'attitude', and as least one made a point to stand up loudly and walk out of the meeting. He didn't do a good job of handling the questions. Everyone in front of the room looked uncomfortable.
I forgot: Tim Yeager gave a brief financial report for the public, and then answered a question privately for me. I have been concerned about the $75MM running out before a deal was done. He was reassuring that this was not an immediate problem. He referred me to public filings and the status of WMMRC as sources of money going forward. He spent a lot of time explaining WMMRC, btw.
As I said, shareholders were getting a little ticked. Toward the end MW and Chad had it down to a 'joke', saying 'you probably already know this, but my answer is that we cannot discuss that in the room today.'. The message was that we should believe in the strategy.
Attorney Byrd stood up at one point to quiet the group, saying that Regulation FD of the SEC forbids discusion of non-public information in a meeting like this.
Two people asked why, then, the company couldn't make a PUBLIC announcement about their plans. Chad Smith was firm and said that there would be no such press release issued.
For some reason, board member Eugene Davis sat in the back of the room the entire time, while everyone else filled up the front rows. The final question was announced, asking yet again if, in general terms, the company couldn't comment on the general market for businesses like ours, and acquisitions such as we were considering. There was really a need in the room for some sort of an answer. It was very uncomfortable for all involved.
Eugene Davis turned out to be a bid man. He reminded me a lot of Brian Dennehy, the actor. Unlike MW or Chad, he spoke loudly and confidently and didn't repeatedly stop to say 'uh' or 'ah' or whatever. I wish I had recorded his 3 minute answer but I did not.
What he said (again, in complete contrast to the prior 45 minutes, in a loud and clear voice that made everyone stop and sit up and take notice was:
1. He heads the committee searching for acquisitions.
2. They have been working very hard, "every week", for opportunities.
3. They have considered "literally dozens" of opportunities.
4. The market for acquisions right now is "very good" (this got a shout out from a couple of us, at least it was kind of an answer to all the previous questions).
5. Any acquisition we make would have to (1) be currently and immediately profitable: no turnarounds!; (2) in accordance with the guidelines for using the NOL's, otherwise it would be a dis-service to shareholders not to use them properly, and (3) retain that company's existing management team.
6. He really was big on Blackstone. He said that what shareholders fail to understand was that just getting Blackstone was a real coup for the company. Blackstone has employees who are performing many of the background work for us that is normally done by the companies themselves - we have no staff, so Blackstone is doing it for us. He said they were doing this work for 'free' due to relationships between Blackstone and BOD members.
7. He explained in detail (as I wish MW had done, he really was much more impressive than MW in this meeting setting) that the markets now are "flush" with money to do deals. Every deal has to be done quickly and quietly. He used Apple as an example of a company that could write a check tomorrow and outbid us for any deal we came up with.
8. He said members of his committee were (1) looking for businesses for sale; (2) identifying possible co-investors for those deals; and (3) structure a deal that did not dilute existing shareholders or betray our best interests.
Eugene Davis got a relieved round of applause when he finished, and Mike wisely ended the meeting then and there.
PS: When Eugene Davis approached the podium I overheard hiim say to the front row that he had been enjoying being in the BACK of the room and not up in front. It really was uncomfortable for all parties.
END of report. I wish there had been something (anything?) of substance, and I was intrigued that there seemed to be no hedge fund types there at all. I was not invited to lunch with the BOD... ;)
Tim made it a point to emphasize the time value of the NOLs. He out that we started with 30 years and now he grinned and said they were still 29 years to go to use them. They were very upfront and firm about the value of the NOLs: 5.9 billion was mentioned several times
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Further update/clarification: I gave the wrong impression. I did not mean to say ithat Blackstone was doing all the work for free. My point was that Blackstone have staff doing work normally done by the hiring company and that work was being done for free as a courtesy to our company.
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I took a few other short notes on the meeting, and I'm home now, so here is some additional 'color'.
I arrived about 45 minutes early.
After I checked in with Doreen Logan, I sat down outside the room and waited for things to develop. The first director I saw arrive was Eugene Davis. Mike W., Chad Smith and the attorney Jeffrey Byrd were already there dealing with shareholder questions in the lobby.
The signboard downstairs said the meeting was "10:30-12:00". although all the materials said 11:00. I'm sure this was simply because this is when the room was reserved. Darn if some 80+ year old shareholder was demanding an answer to why the signboard said "10:30" and the proxy materials said "11:00". They had to answer the question twice for him. I already had a bad feeling about shareholder participation at that point.
As the shareholders checked in Doreen would ask if they held their shares in street name or in their own name. She said "I've got 8,000 shareholder names in my computer I can look up, but if they're held in street name all I see is "Merrill Lynch" or whatever'. (This corresponds to the information released publicly by WMIH a few months ago when they said there were 8,043 (?) registered shareholders. I could never figure out who these shareholders are but now I know: it is all the 80 - 90 year old shareholders who must have owned Washington Mutual from the 1980's or whatever and took possession of their certificates. Everyone who told Doreen they held their own shares was a very very old person).
At one point I asked Doreen if she worked for WMIH. She explained that she is actually an employee of the TRUST but moonlighting today for WMIH.
One shareholder came up and registered and started talking about the original seizure, which seemed to be a popular topic in the hallway. Doreen became quite emotional in her answer. She said that the way she learned about the seizure was that the phones began ringing off the hook in WAMU headquarters from all the major news media - no one had told the employees anything. It sounded very traumatic.
(With one shareholder Doreeen also discussed the deposition she did for the bankruptcy hearing, but I didn't hear the whole discussion so I won't comment).
By the way, MW said hello to me and shook my hand when he saw me, and he was not surprised to see me, so he must have kept tabs on this message board where I reported I would be attending.
Another interesting thing was the voting procedure. I had gone online before the meeting and opted 'out' of voting, telling them I would attend the meeting and vote my shares in person. I expected them to have my name and share count at the meeting, but they did not. Instead they expected me to prove my ownership of the shares as/of record date by providing a statement or fax or something, which I had not prepared for. Jeffrey Byrd the attorney was helpful and suggested I call my broker and have them fax something quickly to the hotel, but it didn't make sense to me to do that work. Doreen said the "reality" of the voting was that it wouldn't matter if I voted or not (paraphrasing).
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A couple of things from the shareholders meeting:
1. If this is useful: here is how the directors sat at the meeting. There were two rows of three seats:
(Holliday) (Scheiwe) (....empty.........) -------- AISLE ------------ (Graham) (Glossman) (Renoff)
.... and Eugene Davis sat way in back.
2. I did not see any interaction between any of the directors at the meeting. I did not at any time notice any one of them speaking to any other other of them, except for a couple of occasions where Mike said something to them.
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Reprinted/reposted with permission from Jaysenese
...Catz
AI
