Christopher & Banks defends itself amid investor probe
Christopher & Banks has defended itself against claims by investor Macellum Advisors that certain board members are involved in potential "wrongdoing, mismanagement and breaches of fiduciary duties".
Macellum, which holds a 5.2% stake in the company, said earlier this month it was gathering information on a number of board members. It had requested to inspect the US women’s wear retailer’s books for information related to directors’ stock sales before the company lowered its guidance last year.
The investor said Christopher & Banks' share price dropped by 26% and 28% after two outlook cuts late last year and that certain directors had sold some of their shares weeks prior.
In response, the company said is in the process of complying with the books and records demand pursuant to applicable law.
In a statement this week, it said: "The sales of CBK stock by three of the company's directors in September 2014 questioned by Macellum were all promptly made following the company's earnings announcement in September 2014. In each case, the trade was pre-cleared pursuant to the company's stock trading policy. The fourth director did not sell his shares but rather transferred shares to his former spouse in accordance with the terms of his divorce decree.
"The company is confident that an objective review of the facts will reflect that there were no violations of law by any of these directors."
In April, Macellum criticised the board, suggesting the company consider a sale.
In a letter addressed to chairman Paul Snyder, Macellum said the board had "not exercised good oversight, governance or leadership" and that it was rebuffed when it approached the company on a friendly basis to offer the assistance of several qualified potential directors, including former CEO, Joel Waller.
In its latest quarter, the company swung to a loss of US$1.4m from a $2.6m profit a year ago. Sales were down 11.4% to $91.6m.
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