Dispute sharpens over PeoplesBank parent
Facing pressure from a shareholder who thinks the bank should be sold, the board of Codorus Valley Bancorp is pushing back.
- In a letter filed this week with securities regulators, the bank board rebuffed arguments made by investor Abbott Cooper of New York-based hedge fund Driver Management.
- Cooper has claimed the board lacks independence from bank executives and he has questioned decisions related to executive compensation. He currently owns about 6.5% of the bank's stock.
- "We strongly disagree with your mischaracterizations about our Board, executive leadership and Company," the board wrote in its Oct. 6 letter to Cooper.
- Codorus Valley is the parent of PeoplesBank, which has branches across Central Pennsylvania and northern Maryland.
Why is this happening: Cooper has been advocating for a sale of Codorus Valley since early summer, arguing that a sale will return more value to shareholders than remaining independent.
What's happening now: In a Sept. 30 letter, Cooper noted he had requested to speak again with two board members, Cynthia Dotzel and John Giambalvo. They first spoke in August, according to the letter.
- In its letter this week, the board told Cooper: "You expressed your views at length during all of these meetings, as well as in your correspondence to us and in other materials. At this time, we do not believe another meeting with the Board is necessary or productive. Management will be in touch with you as part of their standard shareholder outreach with the upcoming earnings cycle in November."
- In a phone interview, Cooper acknowledged the letter but said it did not address his specific questions or concerns.
- "If I've mischaracterized something, set me straight, which they haven't done," he said.
What's next: The impasse is unlikely to end soon.
- Cooper is gearing up for a potential proxy battle next year during which he would seek to install board members who agree with him
- He took a step in that direction this week by asking state banking regulators for permission to own or control more than 10% of Codorus Valley's stock.
- Cooper said the move is necessary under state law regardless of whether he buys more shares himself. It essentially allows him to vote on behalf of other shareholders if they desire.
- In a statement, the bank said it is aware of the request but could not comment since it had not seen a copy of the application
- "We seek to work collaboratively with our shareholders and value their input,” the bank added.
WHAT'S COMING UP: A hearing on proposed hikes in water rates for customers of Hanover Municipal Water Works. Pennsylvania utility regulators are seeking to gather public input during a telephonic hearing scheduled for Thursday, Oct. 14. To participate, people must call 800-684-6560 and register by 3 p.m. on Tuesday, Oct. 12.
- The Hanover water system serves customers in the borough, as well as 11,000 in the surrounding area, including Penn and Heidelberg townships in York County and Conewago Township and McSherrystown in Adams County.
- Under the proposed rate increase, the quarterly bill for the average commercial customer would rise from $154.02 to $204.11, according to documents filed this summer with the Pennsylvania Public Utility Commission.
- The average industrial user would pay $1,701.98 per quarter, up from $1,366.66.
- Among the parties weighing in on the rate case is Hanover Foods, a food manufacturer with several plants in the area. The company is currently locked in litigation with environmentalists over allegations of water pollution
WHAT'S OVER: A lawsuit by a business that was denied a waiver from the state to stay open during the early months of the Covid-19 pandemic. The business, Levittown-based Kenwood Pools, was seeking class-action status for the lawsuit, which was filed in May 2020 in U.S. District Court for the Eastern District of Pennsylvania. A judge this week sided with the defendants, which included Gov. Tom Wolf and former Pennsylvania health secretary Dr. Rachel Levine.
- The suit claimed the state's waiver denials violated the U.S. Constitution's promise of equal protection under the law.
- The state allowed some businesses to stay open but others in similar circumstances had to close, the lawsuit argued -- a situation confirmed by a recent audit of the state's waiver program.
- In an 11-page opinion, a judge said the issue is moot and that the state was immune from lawsuits under the 11th amendment. The court did not consider the equal protection claims.
- Efforts to reach an attorney for Kenwood were not successful.
The background: Thousands of Pennsylvania businesses applied for waivers to stay open in spring 2020.
- A report by Pennsylvania Auditor General Timothy DeFoor described the program as flawed and confusing for businesses.
- Businesses in the same industry, for example, got conflicting answers on their requests for waivers.
WHAT'S REOPENING: The window for applying for grants under the state's Redevelopment Assistance Capital Program, which showers millions of dollars a year on construction projects around Central Pennsylvania.
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Compiled and written by Joel Berg