Monday, September 14, 2009

Dialectic Capital Management

I last wrote about California Micro Devices in this blog on August 30. As I noted then, CMD has an annual meeting scheduled for September 17 (this Thursday) and it faces a challenge from Dialectic Capital Management.

The back-and-forth of charge and counter-charge has intensified in the days leading up to the vote, which will determine who is to occupy three of the seats on CMD's seven-seat board of directors.

Last week, CMD alleged that DCM had reneged on a settlement agreement. The company said that the two sides had struck a deal according to which Dialectic would halt its opposition to the re-election of the full board, and that in return for this, after that re-election, CMD would expand the size of its board to none, adding two of the Dialectic nominees.

But, Chairman Wade Meyercord wrote: "To my great surprise and disappointment ... while our lawyers and theirs were finalizing a written settlement agreement, Dialectic reneged on the agreement."

Dialectic has responded that there was no settlement, that CMD has refused to engage in serious negotiations, and that this charge is "clearly a last ditch effort by a desperate Board to maintain its fleeting grasp upon the privileges the directors have so lavishly bestowed upon themselves."

Whoa, dude. Lots of adjectives there.

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