PL Capital has fired another shot in its ongoing dispute with Banc of California in Irvine.
Richard Lashley, a PL Capital principal, is upset that Banc of California's board, via a letter from special counsel, has refused a meeting to discuss "serious and substantive concerns" that include a recent naming rights deal for a soccer stadium.
Banc of California took nearly four months before turning down the request from one of its biggest investors, Lashley claimed in a recent regulatory filing. PL Capital, which owns about 4.8% of the $10.2 billion-asset company's stock, is still pressing for a meeting.
The board declined to meet because doing so would have presented "significant regulatory and legal issues … and, accordingly, would not be in the best interests of the company and all of its stockholders," David Anders, a partner at Wachtell, Lipton, Rosen & Katz, wrote in an Aug. 31 letter included with PL Capital's filing.
Banc of California's board had "serious concerns" about PL Capital's prior conduct, Anders wrote, claiming that the investor had worked to "disparage the company and its hiring efforts in local markets, obstruct its retention of key employees and interfere with then-active capital raising efforts."
Lashley, for his part, responded that Anders' letter was "filled with inaccuracies and falsehoods," while denying that PL Capital had interfered with hiring and retention efforts or with capital raising.
Lashley also raised concerns about Banc of California's decision to spend $100 million on the naming rights for a soccer stadium that should be completed in 2018. The decision "raises serious questions about governance and wasting corporate assets" and is "also apparently rife with potential and actual conflicts of interest due to the relationships" noted in two different news articles, Lashley wrote.
Articles by the Los Angeles Times and Bloomberg have noted that Jason Sugarman, brother of Banc of California Chairman and Chief Executive Steven Sugarman, is a minority investor in the team that will use the stadium. A Banc of California spokesman told Bloomberg that Jason Sugarman had no involvement with the naming rights agreement.
Lashley and Banc of California did not respond to requests for comment.
PL Capital and Banc of California have had a contentious relationship in recent years.
Lashley in 2014 claimed that Sugarman belittled him during an investor conference. Last year, the activist investor urged the company's lead director to disclose details about Sugarman's involvement in an investment fund that had violated securities laws.
During Banc of California's 2016 annual meeting, shareholders backed a proposal from PL Capital to adopt a majority voting standard to elect board members.
Banc of California has also had run-ins with another investor. The company filed a lawsuit in 2014 against Basswood Capital Management, claiming that the hedge fund violated a confidentiality and nondisclosure agreement tied to a potential private placement by using data in the pact to buy shares in the open market. The parties settled the matter a few months later.
Separately, Banc of California disclosed on Tuesday that its chief financial officer, James McKinney, will resign in November after the company submits its next quarterly filing. The company said McKinney, who is leaving for personal and family reasons that require him to move to Chicago, will be available to consult at no charge until next year's annual report is filed.
Banc of California said Francisco Turner, its chief strategy officer, will serve as co-principal financial officer with McKinney as it searches for a new CFO.
Andrew Liesch, an analyst at Sandler O'Neill, wrote in a note to clients that the departure was "unexpected" since McKinney had just become Banc of California's CFO last November. "The company has a deep bench of accounting personnel, which should aid the transition to a successor," Liesch said, noting that Turner "is a solid choice for this position."
Paul Davis contributed to this report.