Breeden to Block: Stop Bleeding at Option One

Breeden Capital Management LLC, Greenwich, Conn., the investment fund manager looking to conduct a proxy fight for board seats at H&R Block, has called on that company to "stop the bleeding at Option One."Breeden said Block has not disclosed what additional losses it has taken on Irvine, Calif.-based Option One Mortgage Corp. since it revealed that it lost $1 billion on the mortgage operation in fiscal year 2007 (ended April 30). "We are concerned about the levels of cash being infused into this unit," the Breeden statement said. "We believe the company and the board should find a strategy to curtail further growth in subprime exposure and permit prompt exit from Option One with the lowest possible net losses." Block has agreed to sell Option One to an affiliate of Cerberus Capital Management, New York. The deal is expected to close in Block's second fiscal quarter, which ends in October. However, Block filed an 8-K statement with the Securities and Exchange Commission stating that the deal may close during the third quarter of its fiscal year, on or before Dec. 31, 2007.