Baltimore Bancorp Chief Executive Officer Harry L. Robinson was sacked by his company's board of directors yesterday, adding yet another twist to the company's last-ditch bid to keep control of the company out of the hands of dissident shareholders led by Baltimore Blast owner Edwin F. Hale Sr.
Mr. Robinson's 44 years with the parent company of the Bank of Baltimore ended when he was not re-elected as chairman and CEO at the board's annual organization meeting yesterday, prompting him to resign. He then pulled the cord on a "golden parachute" contract that netted him a lump-sum payment reported to be $1.7 million, in lieu of his salary and bonus through January 1994.
"I'm comfortable with what has happened," Mr. Robinson, 62, said. "I've become a very public person. I've had my picture in the paper more than the governor. . . . Not by design, believe me."
The company's new chairman is Robert F. Comstock, a 55-year old Montgomery County lawyer who has been a director of the company since 1987, when Baltimore Bancorp bought Metropolitan Federal Savings and Loan, which Mr. Comstock headed.
The company also said that its board of directors has formed a committee to explore whether to sell the bank.
The company's problems with its stockholders began last year when it refused to consider a $17-a-share takeover proposal from First Maryland Bancorp, the parent of the First National Bank of Maryland.
But none of the three directors on the committee is a member of the six-man slate backed by Mr. Hale that joined the 18-member board at yesterday's meeting, and Mr. Hale said later that he doesn't support selling Baltimore Bancorp at this time.
Mr. Comstock's election was presented by both sides as management's strategy to win a second election, which U.S. District Judge J. Frederick Motz ordered last Friday, on whether to expand the company's 18-member board of directors to 28 seats. Since only the Hale slate has fielded candidates for the 10 proposed seats, the Hale group will control the company if the proposal passes.
Judge Motz ordered the new election because there were more than 1 million disputed votes in the first election on a Hale-backed proposal to expand the board to 28 members. Corporation Trust Co., a Delaware company hired to referee the voting, said the proposal passed by about 970,000 votes. Corporation Trust counted the disputed votes as abstentions, but management said those shares should be voted against expanding the board, giving it a narrow win.
Management said yesterday that the new vote will be held Aug. 29. The dissidents are hoping to make that vote unnecessary by appealing Judge Motz's ruling and trying to get Corporation Trust's vote count reinstated.
Management has also appealed, hoping the 4th U.S. Circuit Court of Appeals will declare it the winner in the original vote.
The incumbent directors and the Hale group agree on little these days, and they had sharply differing views of Mr. Robinson's departure and Mr. Comstock's ascent.
Mr. Comstock said that he could distinguish himself from Mr. Robinson in a new campaign. Mr. Robinson was criticized by many shareholders for not being responsive to their concerns, especially when he spurned the offer from First Maryland.
"They did not feel that at this time under Harry Robinson they were getting proper attention," Mr. Comstock said. "My door is open, my phone is open.
"I will listen to people. And I will tell the shareholders that."
But company President Jack Haigh said that, during the new campaign, the incumbents will still try to claim credit for Mr. Robinson's successes, mostly in keeping real estate loan losses moderate so far during the recession.
"The organization kept it that way," Mr. Haigh said.
Mr. Hale said he has known for weeks that the rest of the board planned to dump Mr. Robinson, if necessary, in order to keep the Hale slate from controlling the board.
"A Sullivan & Cromwell lawyer told me a month ago that this would be their strategy," he said. At that time, he said, the NTC attorney from the bank's law firm offered to put Mr. Hale on the committee to try to sell the bank, but Mr. Hale said he refused.
"As usual, they totally missed the point," he said. "The stockholders are more fed up with the way the bank has been run for the last five years [than by the rejection of First Maryland's offer]. Jettisoning Harry Robinson is supposed to make that right? They're going to try to put a new face on an old body."
Mr. Robinson said that he hoped his departure would pave the way for the proxy fight to be settled before the new vote is held. But neither side made that seem very likely.
"The litigation is continuing," Mr. Comstock said. "No settlement has been reached."
Asked whether yesterday's moves ruled out a settlement, he responded, "We had no choice. They filed an appeal."
"They fully expect that this maneuver will win them the election," Mr. Hale said. "There's not going to be any negotiation. . . . One director told me they were going to win and that was it, and I wasn't going to get control of the board."
Mr. Hale and his attorney, Dennis Gingold, contend that the company's law firm is pushing the confrontational strategy. They point especially to Sullivan & Cromwell partner Benjamin F. Stapleton III, whom Mr. Gingold referred to as "Chairman Stapleton."
They said that Mr. Stapleton refused to accept nominations of anyone but Mr. Comstock to be the new chairman and wouldn't allow Mr. Gingold into the board room.
"Stapleton is clearly in charge," Mr. Hale said.
Mr. Comstock and Mr. Haigh declined to discuss the particulars of the board of directors meeting yesterday, the first since Mr. Hale and the other dissidents were elected in voting that ended May 28.
But Mr. Hale and Mr. Gingold described a tense session in which Mr. Stapleton guided the board through "30 or 40" issues, most of which they said were voted on without discussion.
Mr. Stapleton refused even to give the dissidents a copy of the press release announcing Mr. Robinson's departure, Mr. Hale and Mr. Gingold said.
"They read from a script and stuck it to us," Mr. Hale said. He said that the company is still refusing to give him detailed financial information about its operations.
The board overhauled its committees yesterday but didn't put any Hale-backed directors on the key executive committee. Mr. Comstock said he wouldn't put anyone on the executive committee until he had been on the board for at least several months.