AUSTIN, Texas, June 10, 2019 /PRNewswire/ -- Baines Creek
Capital, LLC, an Austin-based
investment firm, and its affiliated investment funds (collectively
"Baines Creek" or "we"), commented
today on the voting results from the 2019 Annual Meeting of
Stockholders of Legacy Reserves, Inc. ("Legacy Reserves" or the
"Company") (Nasdaq: LGCY) held on June 6,
2019 (the "Annual Meeting").
"On Thursday, June 6, 2019 the
Company's stockholders sent a resounding message of discontent with
the status quo at Legacy Reserves. The results of the Annual
Meeting clearly reflect the widespread dissatisfaction of
stockholders with the disastrous performance under the watch of the
current Board of Directors, as well as the recent actions taken by
the Board of Directors to frustrate stockholder democracy. As
previously announced on May 31, 2019,
Baines Creek delivered an open
letter to stockholders announcing its intent to refrain from voting
its shares to prevent the Company from reaching a quorum at the
Company's 2019 Annual Meeting of Stockholders. The results
indicate that a large number of stockholders decided to take
similar actions in order to let their voices be heard.
The decision by stockholders to either boycott the meeting by
withholding their votes entirely, or by voting against directors,
stands as a clear, undeniable referendum of discontent with the
current Board of Directors, specifically for poor performance,
actions to prevent stockholder democracy and unacceptable corporate
governance practices. Although the Company narrowly obtained
a quorum to hold the Annual Meeting, the 55.7% of shares
represented was dramatically low by historical standards, and the
vast majority of those shares were Broker Non-Votes. Less
than 12% of the shares outstanding were voted on the election of
directors. Of those that were voted, nearly half were
withheld from the current director candidates, and three of the six
director candidates received more votes against their election than
for it.
If we had cast our votes against each director candidate rather
than refrain from voting altogether, then the entire board would
have had more than 80% of the votes cast voted against their
election as directors. If other stockholders who also
protested by not showing up to vote at the Annual Meeting had
instead voted against Board members, this number would have been
even higher. The voting results unequivocally demonstrate
stockholders' utter lack of support for the current Board: it is
remarkable that each director candidate received affirmative votes
from less than 7% of the shares outstanding. This outcome
is the least support we or our advisors can ever remember seeing
for any public company board of directors.
In light of this very clear message delivered by stockholders at
the Annual Meeting, we expect the Board to take immediate steps to
address our collective concerns. From the beginning,
Baines Creek has attempted to be a
friend to the Company and took every action possible to communicate
this to the Board and to management. We are not an activist
investor. We were not looking for a contentious
engagement. For reasons beyond our understanding, the Board
has chosen to make an enemy out of a friend. The Board has
flatly refused to engage with us in any constructive way at every
turn. More recently, the Company has demanded that we
relinquish every stockholder right (as well as the right to speak
with other capital providers in an attempt to help improve the balance sheet) as a
pre-requisite for beginning any discussions. This is entirely
unreasonable and shows that the Board is more concerned about
protecting its own positions than the best interests of its
stockholders.
We invite the Board to engage with stockholders, not to wage war
on them. We do not wish to be adversaries, but simply request
the Board address the balance sheet, operational execution and be
accountable to stockholders. We believe the Company is truly
at an inflection point. With the Company's low-decline
production profile combined with its world class development
opportunities it can drive tremendous growth within cash flow if
the balance sheet were to be fixed. Add in its current strong
management team and you have a combination that can create
significant value for stockholders once it is placed on the right
path. We eagerly anticipate the results of the strategic
review process that we believe to be announced shortly and hope
that the outcome will allow the Company's management to get back to
work creating value for its stockholders. We invite the Board
to engage with all stockholders and to act quickly to meaningfully
address their concerns.
About Baines Creek Capital
Baines Creek Capital, LLC
is an Austin-based investment firm
that follows an opportunistic investment strategy using a
fundamental, value-oriented approach.
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SOURCE Baines Creek Capital, LLC