Two Great Wolf directors quit, believe board failed stockholders

By Lisa Kerner

Charlotte, N.C., April 28 - Steven D. Hovde and Richard T. Murray resigned from their positions as members of Great Wolf Resorts, Inc.'s board of directors "with a sense of frustration and profound regret for what we consider a missed opportunity" to improve Great Wolf for its shareholders, according to a Thursday letter to chairman Joseph V. Vittoria.

The letter was included in a schedule 13D/A filed with the Securities and Exchange Commission Tuesday.

Hovde and Murray said they believe the entrenched "clubby" board has failed the company's stockholders.

"In particular, we believe they have failed to formulate a winning business strategy for creating long-term stockholder value and, in our view, have not been receptive to constructive outside, investor advice that we believe could significantly improve Great Wolf's performance for the benefit of all of its stockholders," the letter said.

Great Wolf is not nominating Hovde and Murray for re-election at the 2009 annual meeting.

According to the letter, the company's nominating and corporate governance committee reduced the board to six members in an effort to reduce expenses.

"We found this action strange in light of the fact that the compensation committee had recently voted (with only Richard Murray opposing) to increase the compensation paid to board members for the upcoming year," Hovde and Murray's letter said.

Hovde and Murray said they encouraged management and the board to form a strategic planning committee and to pursue all options for a potential sale after being contacted by several third parties. There was no follow up by the company to the suggestion, they said.

Hovde is part of an investor group that includes Hovde Capital Advisors LLC and Financial Institution Partners, LP. The group beneficially owns 2,127,330 shares, or 6.86%, of the company's common stock.

Great Wolf is a Madison, Wis.-based, resort owner/operator.

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