Gag order: CPC shareholder silenced
How much is a man's silence worth? For one local company vexed by its most vocal shareholder, it's worth a just a tad under $5,000.
Spencer Connerat, a former Charlottesvillian now living in Florida, appears to have signed an agreement with Charlottesville Parking Center Inc., in which he trades away three shares worth about $120–- along with his right to sue or discuss the company–- for $5,000.
"I can't believe that Charlottesville Parking was so troubled by Spencer's actions," says fellow shareholder Richard Spurzem, "that they would have to do this."
CPC, as the company is sometimes called, has long been troubled by Spencer Connerat's actions. In 1997, for instance, Connerat was awarded a seat on the company board after a successful lawsuit. More recently, he helped organize an attempted purchase of CPC. (As with another recent buyout offer, CPC didn't deign to take the $16.3 million bid to the shareholders.)
Connerat has quite the history with CPC's president, Jim Berry. Back in 1996, Connerat worked for Berry when Berry was a top executive at Jefferson National Bank, the hometown firm whose owners lost out big recently when Wachovia, which bought Jefferson in 1997, collapsed into Well Fargo.
As Connerat has told the story, Berry had Connerat fired for buying CPC stock, something Berry had gotten into his own habit of acquiring. Berry has declined numerous times to dignify the allegation with a response for this newspaper (which owns a single share of CPC stock). So why sell now?
"After 12 years, I have other endeavors," Connerat said last week. "Cash in my hand would mean more to me right now than those three shares."
Connerat has been complaining for years that CPC cloaks its actions in secrecy. The Hook knows something about CPC secrecy, having watched a company lawyer walk away with some of our hand-written notes at the annual meeting last March.
Recently, Connerat has been alleging that CPC, which owns part of a parking deck, a pair of management contracts and several acres of downtown land, was saving itself for purchase by the City in what Connerat blasted as a "sweetheart deal."
Charlottesville economic development director Aubrey Watts disputes the characterization and says there's "no activity underway on that right now." Having purchased an over $250,000 study on its potential merits of buying CPC last year, Watts has been City's point person for that possible transaction.
Connerat is a man with a habit of sending CPC personnel near-daily emails that might contain video clips of Motown stars or sound files from 1980s UVA frat parties. In August, he sued CPC again, this time seeking a court order for some documents. (He ended up receiving them before the hearing took place September 10.)
So, perhaps to rid itself of a perennial thorn in its side, CPC sent Connerat the paperwork for the gag-order-infused transaction last week, and he said he wouldn't be able to chat about CPC if he signed. Since then, telephone conversations with Connerat have gotten shorter, the emails more sporadic.
"It's unlike him to be reticent," says Charlottesville stock broker Sandy von Thelen.
"I hate to see him silenced," says shareholder Brent Nelson.
Before executing the agreement– if that's what he did– Connerat said that company-hired lawyer David Petit had approached him with the deal. Citing client confidentiality, Petit declined to comment.
One of Connerat's reasons for signing away his rights was the $5,000 he'd gain for his family's financial health. And yet his family, he concedes, continues to own 1,480 shares of CPC stock, a nest egg that could be worth over $60,000. Therefore, Connerat's transaction puzzles.
"I don't understand why Mr. Connerat, who has thankfully been an advocate for an open process for this organization would agree to be silenced," says Nelson. "And as a stockholder in this organization, my question is why would they feel the need to silence a stockholder whose family will continue to own stock after this deal."
CPC president Berry, reached October 2 by telephone, declined to speak of any deal–- choosing neither to deny nor confirm its existence.
The company he heads was founded in 1959 as a means for providing low-cost parking for downtown shoppers. However, last year, it decided its mission accomplished, declared itself for sale, and then in January broke with 48 years of tradition by paying dividends.
That's the kind of opportunity that got several buyers interested. Richard Spurzem, for instance, submitted his own bid for $9.3 million in April.
"This is a classic case of greenmail, says Spurzem of Connerat's latest move. ""Look up the definition of hush money."
Wachovia's buyer– originally Citicorp and now Wells Fargo– is updated October 14.