Investment idea generation.

Activist Letters

Casey Capital letter to Essex Rental: Stopping lying to shareholders

Recall that Casey Capital owns 5.9% of Essex Rental in what has been quite a saga. Prized quote from the letter below, "Essex continues to mislead stockholders regarding Keddie's nominations and tells stockholders that votes for our nominees will not be counted." Here's the latest letter from Casey: 

May 21, 2015

Essex Rental Corp.

Board of Directors

1110 Lake Cook Road, Suite 220

Buffalo Grove, Illinois 60089


Lee D. Keddie and Casey Capital have responded several times to Laurence Levy's offer to appoint Lee Keddie and John Climaco to the board after the annual meeting so that they would constitute two of the board's seven members.

While we remain open to seeking a resolution through settlement, we have been consistent in our communications with Essex that we are not in a position to accept the offer because it does not adequately address the concerns underlying our position that Essex desperately needs corporate governance improvements and a cost-cutting program. (See our correspondence from May 13, May 18 and May 19.) To date, Laurence Levy does not seem to understand how important corporate governance improvements and a cost-cutting program are to Essex's stockholders.

Finally, after we asked Essex on several occasions to provide us with a written term sheet including the board's firm offer of settlement terms supported by board consensus, we received from you yesterday what purports to be such an offer.

We are encouraged with the progress we are making in our ongoing dialogue and engagement. Unfortunately, this offer simply does not reflect any development from prior communications between Essex and us. Specifically, in an attempt to respond to our corporate governance concerns, you propose to hire an independent compensation consultant to evaluate board compensation. We believe that this is counterproductive to the cost-cutting program. We are more concerned about your overall corporate governance plan and that it needs a comprehensive overhaul.

With respect to cost-cutting efforts, Essex has already announced to stockholders its plan to terminate the Hyde Park lease in 2016. We have communicated to you our position that the better approach for stockholders is to terminate the lease arrangement immediately.

In addition, your offer to evaluate strategic alternatives remains limited to Essex Crane Rental Corp., even though we have clearly stated that a company-wide approach to strategic alternatives would provide the greatest benefit to stockholders.

Essex continues to mislead stockholders regarding Keddie's nominations and tells stockholders that votes for our nominees will not be counted. Essex has been notified several times that Mr. Keddie's nominations are valid and that Essex's statements to the contrary are misleading. Essex claims that Mr. Keddie's nominations were rejected because, according to Essex, Mr. Keddie was not on the transfer agent stock ledger as of April 10th. Yet we have provided to Essex clear evidence in the form of a direct registration statement dated March 25, 2015, which clearly shows that your own transfer agent identifies Mr. Keddie as a record holder as of that date. You do concede that Mr. Keddie is in fact on Essex's stock ledger as of April 20th record date for the 2015 Annual Meeting but you fail to account for the recordkeeping of Essex and its transfer agent between the dates of March 25th and April 20th or provide any reasonable explanation as to why Mr. Keddie is not on the stock ledger during this time period.

We continue to believe Mr. Keddie has complied with the Bylaws and to be concerned that Essex's blatant disregard of its Bylaws and the records of its transfer agent shows its indifference to the interests of all stockholders.

Given that you are misleading shareholders, we are cautious with settlement negotiations and conversations with you. That said, we remain hopeful that we can reach a settlement that will benefit all Essex stockholders.


Kevin M. Casey