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Bristol seeks changes to Advocat's board, questions company's silencing of board chairman
By Lisa Kerner
Charlotte, N.C., March 14 - Advocat, Inc. shareholder Bristol Investment Fund, Ltd. responded to the company's news that its chairman of the board Wallace Olsen will no longer be Advocat's spokesperson.
In a letter to president and chief executive officer William R. Councill, III, the investor said, "We are concerned about the public perception of this change, as it is customary for chairpersons of public companies to champion their cause with management, employees, shareholders, and the investment community." Bristol manager Paul Kessler questioned if a succession plan was possibly in place.
The letter was included as part of a schedule 13D filing with the Securities and Exchange Commission.
In the letter, Bristol also reiterated several recommendations it made during a discussion with Councill, including establishing a special committee that would retain a financial adviser to start an auction process, solicit offers for the company or engage in discussions with strategic buyers.
Bristol also wants the board to refrain from expansion opportunities and focus on a stock buyback plan, as well as nominate two Bristol choices to its board.
"As one of the company's larger shareholders, we would prefer to work with you and the board in a cooperative manner and hope that you appreciate that working with us is strongly in the company's best interest and that of all shareholders," Kessler said in the letter.
Bristol beneficially owns 256,861 shares, or 4.4%, of Advocat's stock.
Advocat, located in Brentwood, Tenn., provides long-term care services to nursing home patients.
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