Harry B. Brock Jr. lost an important court battle last week in his fight to win control over Compass Bancshares.
By refusing Mr. Brock's request for a preliminary injunction against the bank, Federal District Judge Sam C. Pointer Jr. cleared the way for the fate of Alabama's fourth-largest bank to be decided by its shareholders at the April 11 annual meeting.
Mr. Brock, a dissident Compass director, brought suit against Compass alleging that the bank's management had violated various Securities and Exchange Commission rules regarding the solicitation of proxy votes. If Judge Pointer had sided with Mr. Brock, he could have forced Compass to send new material to its shareholders, which might have delayed the April 11 meeting and given Mr. Brock more time to line up support.
But Judge Pointer ruled instead last Tuesday that "there's no indication that stockholders in any way are being misled" in the proxy battle between Mr. Brock and Compass management.
"I conclude that there is a fair and adequate presentation being made by both sides, and it's a matter essentially for the shareholders to decide," Judge Pointer stated.
Mr. Brock launched his proxy challenge on Jan. 27, putting up a slate of three board nominees in opposition to those selected by management. He has said he will put the bank up for sale if he wins control of the 12-member board.
Mr. Brock's decision to take the dispute into court produced mixed results. A deposition by Compass attorneys produced the revelation that Mr. Brock had surreptitiously taped his telephone conversations with investors, analysts, reporters, and Compass employees.
But Compass suffered some embarrassment as well. A deposition by Mr. Brock's attorney confirmed a recent American Banker story that Compass chairman and CEO D. Paul Jones Jr. held discussions with Regions Financial Corp., Birmingham, about a possible "merger of equals."
Mr. Jones described a January meeting with Regions CEO and chairman J. Stanley Mackin. The two men had discussed the possibility of Mr. Jones succeeding Mr. Mackin as CEO of a combined company. These exploratory conversations went nowhere.