The chief executive of New Jersey's IBS Financial Corp. said the company will spend "whatever it takes" to pursue a lawsuit against a dissident shareholders group.
The Cherry Hill thrift filed suit in U.S. District Court in Camden last week against the Committee to Maximize Shareholder Value, alleging the group failed to disclose all information required by federal securities law to nominate one of its members to IBS' board of directors.
In particular, the company claims that the shareholders group, led by former New Jersey thrift executive Lawrence B. Seidman, refuses to identify investors, limited partners, members, and others supporting their nominee, Ernest Beier Jr.
"IBS Financial Corp. has an obligation to our shareholders - all of our shareholders - to protect their interests at whatever cost," said Joseph M. Ochman Sr., IBS chairman and chief executive.
Mr. Ochman said the company wants a judge to reject Mr. Beier's nomination and the Seidman group's request for a stockholder list.
Mr. Seidman, who owns a 7.7% stake in the thrift company, would only say that he will battle the suit in court.
"I think Joe should spend more time increasing earnings and less time trying to keep an independent member off the board," he added.
Mr. Seidman has made it clear that he wants to force the sale of IBS Financial because he is unhappy with the stock price and Mr. Ochman's compensation, $1.8 million.
SNL Securities data show that in some ways $750 million-asset IBS lags other New Jersey-based thrifts with assets of $1 billion or less. For example, IBS has reported return on equity of 4.89%, compared with the 7.99% median for its peer group.
Until last week, Mr. Ochman had been on the defensive. Besides battling Mr. Seidman's proxy challenges, he's also the defendant in a slander suit filed by Mr. Seidman last year.
He said that most shareholders are happy with the thrift's stock price, now about $16, because the thrift went public at $10 a share two years ago.
Mr. Ochman said the lawsuit is part of the thrift's plan to battle the shareholders group and ensure that it won't be able to take control.
"They've made a bad decision in picking the wrong company, wrong board of directors, and wrong CEO," Mr. Ochman said.
The board's decision last month to eliminate a seat, reducing membership to six, is one way to stop the group, he said.
But Mr. Ochman said he's confident that shareholders will defeat the committee's nominee for the second year in a row. At the annual meeting last December, a majority of shareholders' rejected the group's bid for two board seats.
