Ed Hale: The struggle continues
Today's column praises Ed Hale for putting up his own money to help save 1st Mariner Bank. Yes, I know that by buying trust preferreds Hale and other directors are hedging their bets. That way, if next month's offering of common stock craters, they'll hold securities that would probably do better in a 1st Mariner seizure than if they bought common stock right away. Presumably they'll wait to convert the TRUPs to common after or simultaneous to the public offering.
Even so, this is real money they're putting up -- the only recent example I know of of an executive giving back his own money to prop up his company. And the extinguishment of the TRUPs bought by Hale and the other directors has a real effect on the balance sheet of 1st Mariner's holding company and the capital ratios that regulators scrutinize.
Comments
While I do admire Ed Hale's perseverance, there have been offers to recapitalize the bank that Ed and the board have dismissed.
Posted by: stockinvestor | February 21, 2010 6:20 PM
some questions that Ed Hale and the Board should answer.
The Exchange transaction of the Trust Preferreds will yield an accounting entry of gain on cancellation of debt of approximately $12 million but will not improve the capital ratios at the bank.
The exchange transaction give Ed Hale an additional 20% ownership.
Why is Ed Hale doing the exchange transaction versus doing the following:
1. liquidate/monitize $2 million of the life insurance policies held at the Bancorp level and do the exchange transaction with the $2 million.
2. Put the $2 million of Ed Hales personal money into the rights offering which would assist in the Bank's recapitalization.
The reason Ed Hale is not buying into the rights offering is because $2 million would only give him an additional 7.5% owenership versus 20%.
so what would you do if you were Ed Hale?
Ed has continued to show that he is more interested in soldifying his ownership position at the bank versus doing what is in the best interest of shareholders.
Yes Ed Hale is a fighter, the question is whose battle is he fighting one for his own survival or the survival of the bank and its shareholders.
The two are mutually exclusive.
Posted by: stockinvestor | February 22, 2010 11:06 AM
Ed Hale was on my soccer team at Sparrows Point High School. I was a senior. He was a junior. We were lucky to have thirteen players come out for the team so you got a lot of playing time at Sparrows Point. After a game that we lost, but kept the score down, this kid came up to me. I never paid much attention to him because he didn't contribute much. I had ran my ass off that day. He came up to me and said, "You played one hell of a game. You inspired me." I remember saying "Thanks" and thinking, 'Who the hell are you? Only later in life did I connect that "Ed" with the "Ed Hale". There was something about him that day that told me he had a "gift of grab" , as my father called it. No one should begrudge anything that Ed has earned or may lose. He has had a trip many of us would have like to have taken..
Posted by: Soccer player | June 24, 2010 10:58 PM