A New York-based investment partnership last week hit a roadblock in its efforts to force the sale of a Los Angeles-area bank.
A Southern California court denied a request by Basswood Financial Partners LP to obtain extensive shareholder records and other company information of Foothill Independent Bancorp, a $469 million-asset bank in Glendora, Calif.
The court determined that Basswood did not legally own the shares under the name in which it made its request, according to the parties involved. Basswood said it has rectified the error and will not give up the fight.
The investment partnership is seeking to inspect Foothill's boardroom records and minutes, accounting books, and list of shareholders owning more than 1,000 shares.
"It's not over," said Matthew Lindenbaum, managing partner at Basswood. "We just want what we're entitled to." The investment partnership last Wednesday sent another letter to Foothill's board requesting the information.
Foothill officials said they were pleased with the court's ruling. They said Basswood is trying to further its own financial interests rather than the good will of all shareholders.
"Basswood has self-serving objectives," said Donna Miltenberger, chief financial officer at Foothill. "They continue to harass us."
She added that the board does not intend to seek buyers, but that "if a formal offer is presented, the board would evaluate it."
Basswood, which owns 9.24% of Foothill's outstanding stock, has pushed for the bank's sale since November. The investment partnership said Foothill's efficiency ratio, return on equity, and return on assets are subpar compared with those of other banks in the western states.