The appointment of two additional directors to Carver Bancorp's board has stoked tensions between the minority-managed company and a dissident shareholder group.
The African-American-run thrift in New York announced this week that it has appointed David L. Hinds, a former Deutsche Bank and Bankers Trust executive, and Dennis M. Walcott, president and chief executive officer of the New York Urban League, to its board.
Boston Bank of Commerce, an African-American-owned bank and a longtime critic of $420 million-asset Carver, is not pleased with the move.
Boston Bank's BBC Capital Markets owns 7.4% of Carver, and Boston Bank's two top executives were recently awarded seats on Carver's board.
Robert Patrick Cooper, senior counsel at the $150 million-asset Boston bank, expressed disappointment that Carver expanded its board without putting the idea to a shareholder vote.
Carver "has once again usurped the rights of shareholders to elect company leadership," he said.
The two sides have been sparring ever since Boston Bank of Commerce failed in its attempt last year to purchase Carver. In May the chairman and chief executive officer of the Boston bank, Kevin Cohee, and his wife, Teri Williams, a senior vice president, were eventually elected to the Carver board after a heated struggle to gain board representation. The fight for seats included a lawsuit against Carver and a contested reelection of board members, which ultimately removed former New York Mayor David Dinkins and shareholder David Jones from the board and paved the way for the couple to take their seats.
A settlement agreement between the two companies included a provision to expand the Carver board to 10 members. But the Boston group has maintained that the appointment of additional directors "won't cure Carver's fundamental problems, that is, a management team that doesn't know how to run a bank," Mr. Cooper said.
After learning of Mr. Cooper's comments yesterday, Carver issued a statement that faulted Mr. Cohee and Ms. Williams for refusing "to recognize any change or good that they can't take credit for.
"Despite the spirit of our settlement agreement, the Cohees continue their personal agenda of trying to take control of the company, instead of working together to transform it," said Deborah C. Wright, Carver's president and CEO, in the statement.
Ms. Wright was tapped to lead Carver in June 1999 to help turn around the struggling company. For fiscal year 2000, which ended March 31, the company reported a net loss of $1.1 million, compared to a net loss of $4.5 million for fiscal year 1999.
Links to past American Banker stories:
- Peace At Last In The Fight For Carver? Well, Not Exactly - May 26, 2000
- Carver Puts Rejected Suitors on Board - May 23, 2000
- Carver May Appeal Chancery Court Ruling - April 26, 2000
- Carver Management Says It Won Board Seat Tussle - March 1, 2000
- Carver Vote Close; Dissidents Threaten to Sue If They Lose - Feb. 25, 2000
- A $2.5M Capital Infusion Buoys New York's Carver - Jan. 13, 2000
- Carver Rejects Sweetened Bid From Persistent Boston Suitor - April 19, 2000