Breeden Capital Management Seeks Greater Role at H&R Block
Breeden Capital Management, an investment fund manager here, has won the backing of three additional proxy firms in its effort to elect three nominees to the board of H&R Block, parent of troubled subprime lender Option One Mortgage.
Breeden said that the firms of Egan Jones, Proxy Governance and Taft-Hartley Advisory Services recommended that shareholders elect the Breeden nominees at an upcoming H&R Block annual meeting. Earlier, Breeden had said that Institutional Shareholder Services and Glass Lewis & Co. had also recommended the election of the Breeden nominees to H&R Block's 11-member board.
In its analysis, Glass Lewis wrote that in its opinion "the extended underperformance of the company's operations and share price warrants a change to the board of directors." Glass Lewis went on to say that a majority of H&R Block's board members have served on the board for at least five years and the board has failed to conduct a "major overhaul of the management team during that time."
Taft-Hartley wrote that the company's underperformance goes "above and beyond the company's recent difficulties arising from its mortgage business."
Proxy Governance, in its opinion, said H&R Block's current board of directors "has allowed management to continue down a poorly constructed diversification path that has led to very poor financial performance."
Richard Breeden, chairman and CEO of Breeden Partners and a former SEC chairman, said that H&R Block's management has lost credibility in the market.
Breeden Capital Management and its affiliates have more than $1 billion in committed capital under management.
H&R Block's mortgage unit, Option One Mortgage Corp., recently trimmed its staff and warned that more layoffs may lie ahead as a result of a restructuring of the business. Cerberus Capital Management is scheduled to purchase Option One from H&R Block in a deal that has been slated to close by the end of October.
According to this newspaper's database group, Option One serviced $69 billion of home loans at the end of last year. (c) 2007 Mortgage Servicing News and SourceMedia, Inc. All Rights Reserved. http://www.mortgageservicingnews.com http://www.sourcemedia.com/