Signature Group Votes Reincorporate in DelawareTuesday, December 31, 2013
Signature Group Holdings Inc. said its shareholders on Monday approved a proposal to reincorporate in the state of Delaware, the latest effort to reinvigorate the Sherman Oaks holding company.
Chief Executive Craig Bouchard argued for the change, saying that operating under Delaware’s “more flexible” corporation laws would make it easier for the company to acquire and grow businesses. More than 93 percent of shareholders, the largest of which is Chicago investor Sam Zell’s Chai Trust Co., approved the switch from Nevada, where Signature is now incorporated. The company has not announced plans to move from Sherman Oaks.
“This approval was an important step in our plan to grow the company,” said Bouchard, a Chicago investor who took over as chairman and chief executive in June.
Signature is the successor to failed Santa Monica subprime lender Fremont General Corp., which emerged from bankruptcy in 2010 under the new name and controlling group of shareholders. The reorganized company struggled to find a successful business model, but after a series of management shakeups has settled upon the role of a holding company for industrial businesses. Its core holding is Burbank’s North American Breaker Co., an electrical equipment company.
Signature plans to sell skin care products and has nearly divested holdings in its distressed debt and “special situations” lending unit, according to regulatory filings. Signature plans to retain a sizable bank of tax credits that can help the company once it becomes profitable.
The company, which completed a one-for-ten reverse stock split in October that plumped up its share price, last month reported a fiscal third-quarter loss of $5.9 million (-49 cents a share), more than double its loss in the same period a year earlier.
Shares on Tuesday closed up 45 cents, or 4 percent, to $10.75 on the Over-the-Counter Bulletin Board.