GREENWICH, Conn. and
NEW YORK, Jan. 22, 2020 /PRNewswire/ -- Lapetus
Capital II LLC (together with its affiliates, "Atlas"), along with
other participants in its solicitation, including BW Coated LLC
(together with its affiliates, "Blue Wolf"), the beneficial owner
of approximately 9.43% of the outstanding common stock in Verso
Corporation (NYSE: VRS, the "Company" or "Verso"), today issued the
following statement to clarify recent comments Verso made regarding
settlement negotiations:
Atlas has on multiple occasions in good faith sought to resolve
its dispute with the incumbent Verso directors in a consensual
manner that benefits all stockholders and minimizes unnecessary
expense and disruption to the Company. These settlement
overtures began in earnest over six months ago in June 2019.
Verso, on the other hand, continues to try to misdirect
stockholders by diverting attention from the Board of Directors'
abysmal governance practices, indefensible capital allocation
strategy and poor operational track record. Just two days ago they
proposed increasing the Board size yet again with an eighth
director to attempt to manipulate Verso's governance without
stockholder approval. We believe that these "red herring"
settlement offers are solely made to try to portray Atlas in a
negative light and are never intended to engage with Atlas in a
meaningful way.
Specific clarification is needed to correct the distorted and
misleading Verso narrative, including:
1. Key Background Information:
- Institutional Shareholder Services
("ISS") Recommendation: "Taken as a whole … additional
change at the Board level is warranted."1
- Delaware Court of Chancery
Ruling: "There are sufficient facts to establish a credible
basis for the Delaware Chancery
Court to infer that there may have been entrenchment motives
and possible wrongdoing by the Verso Board of Directors
affecting the strategic review process that led to the Pixelle
transaction."
2. Verso's Maligning and Misrepresentations Regarding
Nominee Tim Lowe. Verso has continued to
misrepresent the actions of Atlas nominee Tim Lowe. Despite what the Company has said
about Mr. Lowe's participation in the union discussions in 2018,
the Board and its advisors agreed that Atlas and Blue Wolf and its
representatives, including Mr. Lowe, would have such discussions,
which were encouraged and sanctioned by the Board and the senior
management of Verso including, Mr. St. John (the now-current CEO of
Verso). Additionally, Atlas, Blue Wolf and Mr. Lowe worked
collaboratively with the senior management team of Verso, including
Mr. St. John, on the terms that were presented to the Company's
unions. Any inference to the contrary is patently false,
misleading and a reflection of the depths of Verso's
desperation. Atlas and Blue Wolf have no doubt that Mr. Lowe
would uphold his fiduciary duties on the Board with integrity and
thoughtfulness. Furthermore, Tim
Lowe is an excellent director candidate with vast operating
experience in the paper and pulp industry, and Verso's defamatory
commentary is a reflection on the Verso Board's
decision-making.
3. By proposing to expand the Board yet again, Verso is
proposing to dilute the impact of the stockholder vote. In the
last couple of months after Atlas and Blue Wolf nominated director
candidates, Verso has (i) almost doubled the size of the Board and
(ii) agreed to sell a significant portion of the Company's
assets. Then, the Board took another step to offer as a
"settlement" that an additional eighth director would be appointed
by February 15th. It
is concerning to us that the Board has continued to expand the size
of the Board (while potentially downsizing the Company) but yet
refuses to appoint the highly-qualified, independent nominees that
have been presented by one of the Company's largest stockholders.
Indeed, after ISS has made its recommendation, Verso is proposing
to undercut that recommendation by offering Atlas two (2) Board
seats out of an eight (8) member Board, rather than Atlas' three
(3) nominees out of the current seven (7) member Board. Once again
Verso is trying to manipulate the governance process to frustrate
the clear views of the owners, the stockholders.
4. The Specialty Mills Sale. Atlas has
continuously requested additional information in order to make as
informed a decision as possible with respect to the Specialty Mills
Sale. If the sale is approved, Atlas and Blue Wolf would
expect that the newly elected Verso Board, including any Atlas
nominees, would implement the transaction in accordance with its
terms – Verso suggesting otherwise is another false "scare tactic"
to attempt to derail the election of Atlas' nominees.
Atlas believes that this most recent display of
poor communication with investors reveals the extent to which the
Board has been misguided.
Atlas and Blue Wolf encourage stockholders to
vote on the BLUE proxy card today FOR the election of
all THREE (3) of its highly-qualified independent nominees –
Timothy Lowe, Sean Erwin and Jeffery
Kirt.
Atlas Holdings is an industrial holding company with
a portfolio of 20 companies with aggregate annual revenues of
approximately $5 billion, operating
approximately 150 facilities and employing more than 18,000 people
globally. Although we are engaged in a variety of industrial
sectors, Atlas Holdings has been successfully investing in the
pulp, paper and packaging industries since our formation in 1999,
including specifically in the subsectors in which Verso
participates — specialty paper, graphic paper, packaging paper and
pulp. We generate profits for our investors by investing in
underperforming businesses and unlocking the full potential of
those companies over the long term. Atlas Holdings has a
total of approximately $3.0 billion
of committed capital under management, including $1.7 billion in its third investment
fund.
Blue Wolf Capital Partners is a middle market
private equity firm whose partners have decades of experience
investing in and growing companies. Blue Wolf transforms
companies strategically, operationally and collaboratively.
Blue Wolf manages challenging situations and complex relationships
between businesses, customers, employees, unions and regulators to
build value for stakeholders. For over a decade Blue Wolf has
been an active investor in pulp, paper and forest products
companies with a highly successful track record. Blue Wolf
has over $1.6 billion in committed
capital.
IMPORTANT INFORMATION
On December 31, 2019, Lapetus
Capital II LLC ("Lapetus"), together with the other participants in
Lapetus' proxy solicitation (the "Participants"), filed a
definitive proxy statement and accompanying BLUE proxy card with
the Securities and Exchange Commission (the "SEC") to be used to
solicit proxies in connection with the 2019 annual meeting of
stockholders of Verso Corporation (the "Company"). LAPETUS STRONGLY
ADVISES ALL STOCKHOLDERS OF THE COMPANY TO READ THE DEFINITIVE
PROXY STATEMENT AND OTHER DOCUMENTS RELATED TO THE SOLICITATION OF
PROXIES FROM THE STOCKHOLDERS OF THE COMPANY BECAUSE THEY CONTAIN
IMPORTANT INFORMATION, INCLUDING INFORMATION ABOUT THE IDENTITY OF
THE PARTICIPANTS IN THE SOLICITATION AND A DESCRIPTION OF THEIR
DIRECT OR INDIRECT INTERESTS THEREIN. The Definitive Proxy
Statement and a form of proxy is available to stockholders of the
Company at no charge on the SEC's website at http://www.sec.gov and
is also available, without charge, on request by contacting
Lapetus' proxy solicitor Harkins
Kovler, LLC by telephone at the following numbers: 1 (212)
468-5380 (banks and brokers call collect) or toll-free at 1 (877)
339-3288.
Media Contacts:
Prosek Partners
Andrew Merrill / Brian Schaffer
646.818.9216 / 646.818.9229
amerrill@prosek.com / bschaffer@prosek.com
1 Permission to quote ISS was neither sought nor
obtained.
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SOURCE Atlas Holdings LLC; Blue Wolf Capital Advisors IV,
LLC