Up Front: PROXY MOXIE
AN UNUSUAL WAY TO CAPTURE A COMPANY
As proxy fights go, taking away the annual-meeting gavel is an unusual approach. Consider insurer US Facilities, wooed by $397 million Fidelity National Financial, the title insurance company, for $15 per share. The suitor wanted to place resolutions on Facilities' May 25 annual-meeting ballot to put Facilities on the block and run two Fidelity-backed board candidates. But $160 million Facilities said that according to its bylaws, Fidelity was too late.
So Fidelity cooked up its proxy fight. It began soliciting proxies from Facilities shareholders, then threatened not to vote them and pre-
vent the target company from reaching a meeting quorum. Fidelity's lawyer, Michael Goroff, says the pressure was needed to get Facilities' "board to take our proposal seriously." Apparently, the strategy worked. The board voted on May 16 to let Fidelity on the ballot but says it wasn't bowing to pressure. At the meeting, shareholders approved the Fidelity resolutions, though Facilities has vowed to challenge the two board members' election.Linda Himelstein