Baltimore Bancorp yesterday launched a last-ditch effort to keep its management team in office, filing an amended lawsuit in U.S. District Court against dissident shareholders led by Baltimore Blast owner Edwin F. Hale Sr.
The suit alleges that the Hale group made false and misleading statements about the Bank of Baltimore's deposit base, loan portfolio and book value in a presentation to stockbrokers May 17, hoping to convince the brokers to persuade their clients to vote against six incumbent directors seeking re-election.
The Bank of Baltimore is Baltimore Bancorp's primary subsidiary.
The two sides viewed the suit rather differently, as is their usual habit these days.
"It's not more of the same," said Richard Magid, an attorney representing Baltimore Bancorp. "It's quite material, and we believe it will be taken seriously by the court."
"It's more of the same old bull," said Dennis Gingold, a Washington lawyer who represents Mr. Hale.
The company also served notice on two of its biggest shareholders -- T. Rowe Price Associates Inc. and Legg Mason Inc. -- that it intends to call officials of those firms for depositions.
The suit also contends that the insurgents misrepresented the company's reason for deciding on May 21 to hold the polls open until May 28, rather than closing them at the May 22 annual meeting as planned. The company said federal regulators forced the delay; insurgents said management delayed the vote because it was losing.
The suit also repeats earlier charges that the Hale group unfairly compared Baltimore Bancorp's financial performance only to excellent banks in an effort to convince stockholders that the company had faltered under Chairman and CEO Harry L. Robinson. And it repeats claims that Robert A. Pascal, a director candidate on the Hale slate, is ineligible because the job would conflict with his duties as Gov. William Donald Schaefer's appointments secretary.
Six incumbent directors were trounced by candidates recruited by Mr. Hale, according to preliminary vote tallies released Monday. The preliminary vote also showed that more than 58 percent of the company's stock was voted in favor of expanding the board of directors to 28 members from 18.
If the board is expanded, that would give the Hale slate control of the company. Management did not field candidates for the 10 proposed seats.
District Judge J. Frederick Motz will hear arguments Tuesday on whether a company bylaw that requires an 80 percent stockholder vote to expand the board is valid.
The company says the bylaw is legal. The insurgents say a similar bylaw was thrown out in a 1954 court case that they contend is a precedent for this case. Mr. Gingold said Judge Motz is expected to rule on the issue next Thursday.