Breeden Battle For H&R Block Heats Up

Aug 1 2007 | 12:29pm ET

The battle between H&R Block and hedge fund Breeden Partners is now in the hands of the shareholders, and the tax preparation company is beseeching investors to keep a former Securities and Exchange Commission chairman off of its board of directors.

That former SEC chief, of course, is Richard Breeden, founder of the eponymous Greenwich, Conn.-based hedge fund engaged in a proxy battle with the Kansas City-based firm, pushing it to sell its year-old banking division. Breeden and two associates are seeking election to H&R Block’s board of directors.

In a letter to shareholders accompanying its proxy materials, H&R Block CEO Mark Ernst said Breeden offered no plan to boost shareholder value, other than selling the bank, which he called a key part of building its tax business.

“It is unfortunate that a dissident hedge fund, Breeden Partners, has chosen to launch a costly and distracting proxy contest,” Ernst wrote.

In regulatory filings, H&R Block said its strategy is the right one to improve returns, a sentiment echoed in Ernst’s letter. The CEO told shareholders to expect better things when it exits the sub-prime mortgage market: The firm agreed in April to sell its Option One Mortgage Corp. to hedge fund Cerberus Capital Management.

Last week, Breeden, who headed the SEC during George H.W. Bush’s presidency, said the proxy battle was not about dissidence.

“The issue in the pending proxy contest for the board at H&R Block Inc. are the company’s lagging performance, its poor return to stockholders compared to market averages during recent years and its future strategy for growth,” he said.


In Depth

Hedge Fund Selection: Sussex Partners’ Patrick Ghali Bullish On The Best Of The Best

Oct 2 2014 | 5:56am ET

Ten years ago, Patrick Ghali and Robin Nydes co-founded Sussex Partners with the...

Lifestyle

Griffin Donates $1M To Rauner's Illinois Gov. Campaign

Sep 22 2014 | 9:29am ET

Hedge fund billionaire Kenneth Griffin definitely has a dog in this fight. The Citadel...

Guest Contributor

Appraisal Ratio Key To Evaluating Hedge Funds And Other New Investments

Sep 29 2014 | 3:07pm ET

As a former finance professor Peter Hecht experiences heartburn every time he hears...

 

Videos

Editor's Note

    Must Attend Hedge Fund Charity Events For October

    Sep 30 2014 | 9:29am ET

    The crisp Autumnal days of October are upon us, and so are a few of the hedge fund industry’s favorite charitable events. If you have never been to Rocktoberfest, well, you are missing out. And for a quieter evening of sipping and socializing, stop by HFC’s Wine Soiree. Read more…

 

Futures Magazine

September 2014 Cover

High frequency market making

High frequency trading is not evil, it is not a conspiracy and it really is not new; it is the natural evolution of the professional trading community making markets, providing liquidity and hopefully...

The Alpha Pages

TAP July/August 2014 Cover

The Alpha Pages Interview: Senator Rand Paul

Senator Paul sat down in the debut series of the Alpha Pages Interview to discuss the broken tax code, regulation surrounding Bitcoin, and his plans for the 2016 Presidential election.