Upheaval at Signature HoldingsWednesday, June 5, 2013
Signature Group Holdings Inc. on Wednesday announced another leadership change as the Sherman Oaks finance company settled a proxy battle with an investor group.
Signature Group, the successor to failed subprime lender Fremont General Corp., said Craig Bouchard has been named chairman and chief executive, replacing Chris Colville who stepped down on Tuesday. Colville had been chairman since August and added the CEO role after Craig Noell resigned in April.
Bouchard led a group of investors, known as New Signature LLC, which presented its own slate of directors in April, arguing that the company’s leadership wasn’t generating enough shareholder value.
Fremont was a $9 billion Santa Monica financial services firm that rode and crashed in successive waves of the 1990s workers’ compensation insurance boom and the subprime mortgage lending craze of the early 2000s. It narrowly avoided liquidation after filing for reorganization in 2008 following a move to Brea.
Fremont emerged from Chapter 11 in 2010 and renamed itself Signature after Noell and some former partners struck a deal with investors and creditors. Signature became primarily a “special situations” lender, acquiring sub-performing and nonperforming commercial and industrial loans, leases, and mortgages. It also still holds some assets from the Fremont days.
Signature has had a mixed record with its new ventures. It owns a money-making Burbank supplier of electrical circuit breakers, North American Breaker Co., but unsuccessfully invested in a line of anti-aging skin care products, Cosmed Inc., that halted operations at the end of last year.
Under terms of the settlement of the proxy battle, the new recommended slate of directors will be Bouchard, Raj Maheshwari, Peter Bynoe, Patrick E. Lamb and Phil Tinkler. Maheshwari also was part of the dissident group. A revised proxy statement is expected by the end of the week.
The settlement agreement now supports the previous management’s proposal to raise money by selling new stock.
“We believe our investors have an appetite to invest more capital into Signature, and our goal with Craig is to find and execute those opportunities," Tinkler said in a statement.
Following today’s announcement, shares closed up 4 cents, or 6.5 percent, to 76 cents on the OTC Markets.