Wynnefield again takes aim at Crown Crafts, pushes sale, changes to governance

By Lisa Kerner

Charlotte, N.C., Dec. 4 - Wynnefield Capital, Inc. managing member Nelson Obus took offense to what he called a form letter from Crown Crafts, Inc.'s board of directors in response to the shareholder's suggestion that the company hire an outside firm to explore strategic alternatives, including a sale of Crown Crafts.

In a Dec. 3 letter, Obus said Crown Crafts chairman, president and chief executive officer Randall Chestnut implied he would "continue to call the strategic shots at Crown Crafts" despite what Obus called mediocre financial results and a 33% decline in the company's share price.

Obus' letter was included in a schedule 13D filing with the Securities and Exchange Commission.

Obus again urged Crown Crafts to act on his requests "without delay" and said he was upset by the board's arrogance.

In October, Obus requested that Crown Crafts make several changes to its corporate governance, including unstaggering its board, developing a succession plan for senior executives and paying board members with a combination of options grants and restricted stock instead of cash.

It was previously reported that Wynnefield launched a proxy contest in the summer of 2007, saying it doesn't believe the existing board "has the wherewithal" to address the company's problems. The investor said the critical issues facing Crown Crafts are a challenging business environment, stiff competition, lack of a strategic plan and deficient corporate governance policies.

One of Wynnefield's two director nominees, Frederick Wasserman, was elected to the board at the company' annual meeting on Aug. 14. Obus, the other nominee, was not.

Wynnefield and its affiliates beneficially own 1,463,335 shares, or 14.6%, of the Gonzales, La.-based distributor of infant and juvenile products.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.