Solera in Colo. Rebuffed in Effort to Stave Off Proxy Battle

Solera National Bancorp (SLRK) in Lakewood, Colo., says it tried unsuccessfully to resolve a dispute with its biggest shareholder.

The $170 million-asset company said in a press release Monday that it has held informal discussions with Michael Quagliano, who owns 23.3% of its stock, about resolving a potential proxy battle. Quagliano has nominated seven people, including himself, to join Solera's board. He also filed a proposal to shrink the size of the company's board to five directors.

Solera said John Carmichael, its chief executive, had a recent phone conversation with Quagliano where Carmichael "raised the possibility" of awarding Quagliano board representation roughly equal to his stake in the company, "in an attempt to avoid a costly and disruptive proxy contest."

Such an offer could translate into three seats, based on the company's current board size. It could also equal four seats if Solera is able to expand the size of its board to 17 directors.

"Quagliano categorically rejected any negotiated agreement on those terms," Solera said. "He has also declined to propose any transaction in which he would acquire the remaining outstanding stock."

Solera also faces a proxy battle from Kathleen Stout, a former executive who wants to put eight people on the board. Stout, who led a large mortgage team that Solera poached from Universal Lending in late 2012, owns about 0.58% of Solera's stock, the company said in a preliminary proxy filed Friday.

Solera's directors and current executive officers own 17.42% of the company's stock, the proxy said.

"We believe that the 11 directors nominated by the board, with their breadth of relevant and diverse experience, represent the best interests of our shareholders and that these nominees should be re-elected," the filing added.

Efforts to reach Quagliano and Stout were unsuccessful.