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Posts Tagged ‘Robert L Chapman Jr’

Bob Chapman says we may be in “the most dynamic passive investment environment of a lifetime”

Posted in Activist Investors, Robert. L. Chapman, Special Situation, Stocks, tagged , , on August 12, 2009| 8 Comments »

Robert L. Chapman, Jr. recently resigned as Chief Executive Officer of EDCI Holdings Inc (NASDAQ:EDCI) to focus on Chapman Capital in what he says “may be the most dynamic passive investment environment of a lifetime.” In the announcement to the market, said Chapman in his inimitable style:

Having ablated and amputated certain incontinent expenditures, and set EDCI on a prudent, judicious course of balanced scrutiny of acquisition vs. recapitalization, in addition to orchestrating EDC’s Blackburn-Hannover consolidation plan, I avidly look forward to shifting all my attention to Chapman Capital and related investment portfolios during what may be the most dynamic passive investment environment of a lifetime.

We’ve written previously about Chapman’s fondness for “asset-rich companies with battered stock prices,” which sees him frequently operating in the universe of stocks trading below liquidation value. We think it’s a good sign for sub-liquidation value investors like us that Chapman is back.

Read the announcement here:

EDCI Holdings, Inc. Announces Resignation of Robert L. Chapman, Jr. as Chief Executive Officer

NEW YORK, July 2 /PRNewswire-FirstCall/ — EDCI Holdings, Inc. (Nasdaq: EDCI – News; “EDCI”), the holding company for Entertainment Distribution Company, Inc., the majority shareholder of Entertainment Distribution Company, LLC (“EDC”), a European provider of supply chain services to the optical disc market, today announced the resignation of Robert L. Chapman, Jr. as Chief Executive Officer. Mr. Chapman, who also has resigned from EDCI’s Board of Directors, had replaced Interim Chief Executive Officer Clarke H. Bailey, who himself now replaces Mr. Chapman as EDCI Chief Executive Officer and EDC Interim Chief Executive Officer, effective July 2, 2009.

Mr. Chapman commented, “When I accepted the invitation six months ago from EDCI and EDC’s Boards of Directors to lead these companies through the difficult industry and global recessionary environment that characterized the first half of 2009, I conceived and preached the mantra of ‘Don’t Burn It & Don’t Blow It’ as it related to preserving EDCI’s sacred cash holdings. Furthermore, the seemingly constant headwinds of operating in the disc manufacturing and distribution business, with Universal Music Group as EDC’s supermajority customer, required immediate countermeasures to bolster EDC’s liquidity and longevity. Having ablated and amputated certain incontinent expenditures, and set EDCI on a prudent, judicious course of balanced scrutiny of acquisition vs. recapitalization, in addition to orchestrating EDC’s Blackburn-Hannover consolidation plan, I avidly look forward to shifting all my attention to Chapman Capital and related investment portfolios during what may be the most dynamic passive investment environment of a lifetime.”

Horace Sibley, Chairman of EDCI’s Governance Committee, commented, “In the CEO position at EDCI and EDC, Bob has demonstrated the fortitude to make tough decisions to solve tough problems. Over just a few months, Bob has reformulated the culture and streamlined the cost structure in ways that should benefit both EDCI and EDC for years to come. While the Boards of both EDCI and EDC were disappointed to learn of Bob’s decision to re-focus all his energy on his investment business, there can be no doubt that Clarke Bailey, Chairman of the Board, is the ideal leader to whom the baton should be handed to serve as CEO once again.”

Mr. Chapman joined EDCI’s Board of Directors as an independent director in November 2007, and is the Managing Member of Chapman Capital L.L.C., an investment advisor focusing on activist investing and turnaround investing. Prior to founding Chapman Capital in 1996, Mr. Chapman co-managed the Value Group within Scudder Stevens & Clark, which followed employment with NatWest Securities USA and Goldman, Sachs & Co.

Mr. Bailey joined EDCI’s Board of Directors in December 1990. From September 2008 to January 2009, he served as EDCI’s Interim Chief Executive Officer, after serving as EDCI’s Chief Executive Officer from October 2003 to November 2006 and from December 1990 to March 1994. Mr. Bailey has served as Chairman EDCI’s Board of Directors since October 1999, following his service as EDCI’s Vice Chairman from November 1992 to June 1996. Currently, Mr. Bailey serves as a director on the Boards of Directors of both Iron Mountain Incorporated and ACT Teleconferencing, Inc.

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Where in the world is Chapman Capital?

Posted in Activist Investors, Chapman Capital, Stocks, tagged , , on March 4, 2009| 4 Comments »

Robert L. Chapman, Jr.’s 13D poison pen letters are welcome relief in the generally flat, arid landscape of SEC filings, and so it’s no small disappointment to us that he has been quiet of late. When we started Greenbackd, we imagined that we’d be covering his missives on a regular basis. Unfortunately, aside from his appointment in January as Chief Executive Officer of EDCI Holdings Inc (NASDAQ:EDCI), Chapman hasn’t troubled the SEC filing clerk at 5670 Wilshire Boulevard with so much as a Form 13F this year and hasn’t filed a 13D since August last year. We think it’s a shame, and so we ask, “Where in the world is Chapman Capital?”

Chapman is widely regarded as the progenitor of the 13D poison pen letter. He’s also one of the more literate shareholder activists prepared to share his letters with the world at large. Said The New Yorker, in an August 7, 2006 article, 13D:

Bob writes letters-publicly filed with the Securities and Exchange Commission-that no recreational user of, say, the Microsoft Word thesaurus could dare parse, let alone compose. A sampling of Chapman’s correspondence from the past two months reveals the following usages: “pretermit,” “fustigation,” “macerate,” “ablated,” “accretive,” “remora,” “phlebotomizing,” “gasconade.” Only occasionally does he bother to define his terms for the benefit of the less literate. (” ‘Remora’: any of several marine fishes of the family Echeneidae, having on the head a sucking disk with which they attach themselves to sharks; see volatility injected into other activist portfolios due to the remora’s often swashbuckling behavior.”)

…

As with all genres, the 13D attack letter has its tropes: macho swagger about work ethic, war metaphors, regional stereotyping. Chapman’s contributions stand out, however, with a baroque style that is reminiscent of David Foster Wallace: heavy on footnotes (there are fourteen in one paragraph of a recent filing) and on wordplay (no alliteration is too much: “expeditious exercise,” “tutelary tactics,” “insidious ink”). In early June, Chapman fired off a letter (”Dear Denny”) to the C.E.O. of the Dallas-based software company Carreker, whom he called “Long Winder of the Year.” “I have nightmares involving my choking down gourmet tuna sandwiches and uninformed, ‘long-term’ business judgments, both being served in abundant quantity by you and your Texas ‘pardners,’ ” he wrote. (At one point, he referred to the C.E.O.’s brother “Jimbo,” whose “bloodline,” in a recent press release, had evidently “pressed the surface like a varicose vein.”)

Chapman’s oeuvre is “asset-rich companies with battered stock prices” (WSJ.com subscription required) and he often operates in the universe of stocks trading below liquidation value. With more stocks fitting his criteria available now than at any time in recent history, we figure that Chapman Capital should be quite, er, active. Unfortunately, that doesn’t seem to be the case, and the 13D genre is the poorer for it.

Come back, Bob, and bring your poison pen.

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