NEW YORK — Haggar Corp. and its largest shareholder, Kahn Bros. & Co., settled one skirmish Tuesday, but a hot proxy battle is still on the horizon.
This story first appeared in the January 30, 2003 issue of WWD. Subscribe Today.
Kahn, which is seeking at least one seat on Haggar’s board, had sued the Dallas-based apparel company in Nevada federal court for information related to the company’s upcoming annual meeting. Haggar and Kahn Bros.’ president, Thomas Kahn, reached an agreement to dismiss the lawsuit.
In exchange, Haggar will hand over the information Kahn is seeking.
“Rather than litigate, we came to an agreement over the materials,” a Haggar spokesman said. However, “at this point, it appears a proxy fight is looming,” he added.
Kahn told WWD: “They came to their senses. The case was a waste of stockholder money, if you will, by denying a stockholder what a stockholder is entitled to.”
By the end of this month, Haggar has to file its definitive proxy statement. Late Wednesday, Haggar said it would hold its annual meeting April 2. The deadline for shareholder proposals for the proxy is Feb. 7.
The annual meeting would provide Kahn an opportunity to tell fellow shareholders of his desire to join the board.
The release of the proxy might be the next indication of whether Haggar’s management is ready to make some kind of accommodation with Kahn, who has asked that he and Dallas investor Mark Schwarz stand for election to Haggar’s six-member board, which is currently evenly divided between inside and outside directors. Kahn Bros. owns 13 percent of Haggar’s stock on behalf of its investor clients.
Haggar has so far resisted Kahn’s attempts to add himself, Schwarz or both to the board.
Also Tuesday, Haggar released first-quarter operating results, which showed that solid sales growth and favorable comparisons with last year’s charge-depleted bottom line allowed the company to narrow its loss.
For the three months ended Dec. 31, the company recorded a net loss of $2 million, or 31 cents a diluted share. That compares with last year’s loss of $15.5 million, or 1 cent. The year-ago loss included an aftertax $15.6 million accounting charge for the amortization of goodwill and other intangible assets.