Kingsway schedules shareholders’ meeting for Feb. 10, 2008 to discuss board membership

Kingsway Financial Services Inc. has called a special shareholders’ meeting to be held on Feb. 10, 2009 that will address the status of two Kingsway board members that a minority shareholder wants replaced.
The Stilwell Group owns more than 5% of the Kingsway’s common shares as a result of purchases the group has initiated during the past 90 days.
The Stilwell Group has since requisitioned a shareholders’ meeting for the stated purpose of removing two existing Kingsway board of directors — F. Michael Walsh, non-executive chairman of the board, and Shaun Jackson, president and CEO — and replacing them with two of their own nominees.
Representatives of the Kingsway’s board met with the Stilwell Group on Nov. 22 and discussed various matters, including the Stilwell Group’s “non-negotiable” demand for the removal of Jackson from the board, the company said in a statement.
On behalf of the Kingsway board, Thomas A. Di Giacomo, said in his statement: “The board believes that the Stilwell Group’s position with regard to convening a special meeting and the removal of either Mr. Walsh or Mr. Jackson is not in the best interest of all shareholders.
“The Stilwell Group’s requisition will cost the company significant time and expense during a period when the company is in the midst of implementing initiatives [that] are actually consistent with the recommendations of the Stilwell Group.
“We will be urging shareholders to vote against the Stilwell Group’s request.”
The Stilwell Group has said it felt a shake-up was necessary at the board level because the company had not been doing enough to address its underperforming areas.
To this, Di Giacomo responded that Kingsway’s board and management “have taken decisive actions to address the underperforming parts of the company’s business and achieve operational efficiencies.”
These include, the company said, selling York Fire & Casualty Insurance Company, for Cdn$95 million (approximately 1.8x book value), the consolidation of two underperforming subsidiaries into two other well performing business units, the termination of a substantial number of underperforming programs, primarily at Lincoln General, and the elimination of all bank debt, totaling US$157.9 million, during the third quarter.