On Sunday we mentioned the proxy fight brewing between Blockbuster CEO Jim Keyes and shareholder Greg Meyer, the former CEO of DVDXpress (which eventually morphed into Redbox, more or less) and the man who, in 2005, told Blockbuster, look, get in the DVD-dispensing kiosk business, close the stores early, lower costs ... or else. Meyer wants to be elected to the board when shareholders meet in Dallas next month; Blockbuster wants nothing to do with Meyer and instead has asked shareholders to vote for James Crystal, chairman and CEO of Frank Crystal & Company, a "boutique" insurance company.
The Renaissance Tower-based videotailer has already offered its account of Keyes's interaction with Meyer. In docs filed with the Securities and Exchange Commission on Friday, Blockbuster says it told Meyer, sorry, his ideas weren't sound: "The Company's financial and legal advisors subsequently determined that Mr. Meyer's proposal was unworkable and incompatible with the Company's ongoing recapitalization efforts."
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Now, it's Meyer's turn. Today he filed with the SEC a proxy statement in which he dismisses Crystal's candidacy and offers his own version of how things went down with Keyes during their myriad phone conversations in recent weeks. Writes Meyer of Crystal, he was elected to the board when the stock price was $6.50 in '07 (it's now 39 cents), he has no experience in this industry, and he was among the board members who approved Blockbuster's offer to buy Circuit City in 2008. "We believe it was this lack of focus and poor judgment at the Board level that contributed to the rapid loss of market share and the declining stock price of Blockbuster over the past several years," says the proxy statement.
Meyer also recounts his phone conversations with Keyes, during which he informed the Blockbuster CEO he intended to pursue a seat at the board's table. This is how he says one call went down:
On March 22, 2010, Mr. Keyes contacted Mr. Meyer by telephone and notified him that the Board had determined not to nominate Mr. Meyer for election at the annual meeting. Mr. Keyes informed Mr. Meyer that he did not know him well enough to be comfortable adding Mr. Meyer to 'his Board'. In response, Mr. Meyer offered to rectify this by flying to Dallas to meet with Mr. Keyes in person that week to discuss his candidacy and ideas in more detail. Mr. Keyes declined this offer. During the call, Mr. Keyes offered Mr. Meyer a consulting role at Blockbuster if Mr. Meyer would agree to drop his bid for a director's seat. In response, Mr. Meyer reiterated his belief that it was in the best interest of the Company and its stockholders for him to pursue a seat on the board, and he informed Mr. Keyes and Mr. [Rod] McDonald [Vice President, Secretary & General Counsel of Blockbuster], via email, that he intended to move forward with the pursuit of a Board seat.
If you need me June 24, you'll know where to find me.