Internal Investigation of Patelco Could Be Derailed by Proxy Vote

could be aborted this week. The chairman of Patelco's supervisory committee, which is investigating various allegations against the board and management, was unseated in an election by special proxy on Nov. 13. Only days earlier, anticipating the results of the election, lawyers for the supervisory committee had asked a state court to postpone the effective date of the election. If the court petition fails, sources close to Patelco expect the nearly year-old probe to die weeks before it is finished. "The injection of board-sponsored candidates into the proceedings could seriously hamper the committee's ability to bring the investigation to a conclusion," said a 16-page brief that the supervisory committee's lawyers filed on Nov. 8 in California Superior Court for San Francisco County. On Nov. 22, Judge Stuart Pollak will decide whether to delay the election's effective date until Dec. 22 or the date the committee issues its final report, whichever comes first. "I think the position of the members has been voiced by their voting," said Sharon Chapo, president of San Diego-based Chapo Marketing, a firm representing $1.1 billion-asset Patelco. The vote was decided by 8,778 special proxies that members sent to a Burbank, Calif., accounting firm for tabulation. Most members indicated on the proxies their choices for the committee, but some yielded to the board's discretion, Ms. Chapo said. One of the two newly elected supervisory members, Trevor Thomas, is known to oppose the investigation.

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