Proxy Battles Heats Up At FormerCU
CRANFORD, N.J. - (02/03/06) A group of banking speculatorsfiled suit against Synergy Financial Wednesday to force the creditunion-convert to hand over a list of shareholders to aid the groupin its intensifying proxy battle. The group, led by PL Capital, isseeking two of the ex-credit unions nine board seats in aneffort to force the institution to pay out some of its capital,according to John Lashley, the L in PL Capital.The company has too many shares outstanding and too muchcapital for its size. Banks like Synergy should have about 6.5%capital (Synergy has about 10%), Lashley told The CreditUnion Journal. PL Capital, which has been involved in 10 otherproxy fights at small thrifts, cited the management and board ofSynergy Financial, formerly known as Synergy FCU, as overcompensated. We are also disappointed that despite thisperformance, over the past three years Synergys directorsand officers have received compensation and benefits with a currentvalue of over $14 million, which exceeds the total amount of netincome earned by Synergy ($12 million) during the same period. Eachand every incumbent director has received in excess of $500,000 ofcompensation and benefits value during this period,Lashleys partner John Palmer said in a statement. SynergyFinancial executives, including CEO John Fiore, who engineered theconversion from credit union to savings bank, have rejected PLCapitals overtures and urged the banks 1,075shareholders to vote against PL Capitals board nominees. PLCapital, which owns a 9.9% stake in Synergy, plans to use theshareholder list to solicit proxies in its bid for boardseats.