Esopus Creek wants Syms to sell poor-performing stores, blames directors for destruction of stock price

By Lisa Kerner

Charlotte, N.C., April 22 - Syms Corp. investors led by Esopus Creek Value Fund LP said by agreeing to deregister and delist the company's shares, Syms' independent directors "caused the destruction in the market price of the company's common stock and its accompanying liquidity."

In an April 21 letter to the board members, Esopus asked for a full appraisal of the value of Syms' real estate as well as an "exhaustive review" of the performance of each of the company's stores. The letter was included as part of a schedule 13D filing with the Securities and Exchange Commission.

In addition, Esopus requested that Syms close those stores that "do not generate cash flow in excess of the cash flow value that could be generated if such locations were either developed or leased to an unrelated third party."

Esopus said it, along with related accounts, beneficially owns 549,200 shares, or 3.76%, of Syms' outstanding common stock, or some 8.76% of the non-controlled shares of the company.

According to Esopus, the directors made the decision to deregister and delist the shares in December on the recommendation of Syms' controlling stockholder despite objection by Esopus and other large minority holders.

In closing, Esopus asked to meet with the directors to discuss its concerns.

The SEC filing stated that Esopus is no longer part of a group with the Barrington Group.

It was previously reported that Esopus was part of the group that in January suggested fellow shareholders register some of their Syms shares in their own names in an attempt to stop Syms from deregistering.

Esopus said Syms would be prevented from deregistering if it had 300 or more shareholders of record.

The Barrington shareholder group, with a 9.8% stake in Syms at the time, estimated that there are over 1,000 shareholders of Syms, most of whom have their shares registered in "street name," according to a prior news release.

The group also filed a lawsuit in the Superior Court of the State of New Jersey, Chancery Division - Bergen County, against Syms' board of directors alleging that the directors breached their fiduciary duties in causing the company to delist its common stock and deregister its shares.

Syms is a Secaucus, N.J.-based off-price retailer.

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