This is the Second Time the Board's Actions
Have Presented a "Colorable Claim" Under Delaware Law
Crown Castle's Board of Directors Have
Shown
Blatant and Cynical Disregard for Shareholders and
the Delaware Court
Actions Highlight Years of Governance and
Strategic Blunders That Have Cost Shareholders Tens of Billions of
Dollars in Value
Court of Chancery Grants Discovery to Boots
Capital Management to Investigate Whether Crown Castle Had
"Legitimate Corporate Purpose" to Expand Board from 12 to 13
Seats
Court of Chancery to Hold Hearing in Early May
to Assess Potential Shareholder Remedies, Including Potential Delay
of Annual Meeting to Permit Adding 5th Nominee to Boots
Capital Management 4-Person Slate
Court of Chancery Had Requested on
March 8 That Crown Castle Give Prior
Notice to Boots Capital Management of Major Corporate
Developments,1 An Instruction That, in Boots
Capital Management's View, The Board Ignored When It Expanded the
Board From 12 to 13
Ted B. Miller
and Nominees of Boots Capital Management Call on Shareholders to
Directly Address the Crown Castle Board for Its Willful Disregard
of Shareholders and the Court
Boots Capital Remains Supportive of
Appointment of New CEO Steven J.
Moskowitz;
Seeks Normal Course Resignation
of One Director Upon Mr. Moskowitz's Appointment
HOUSTON, April 16,
2024 /PRNewswire/ -- The Delaware Court of
Chancery yesterday granted expedited discovery into a breach of
fiduciary duty claim against the Board of Directors of Crown Castle
Inc. (NYSE: CCI) ("Crown Castle" or the "Company") for expanding
the number of board seats in the critical, late stages of an
ongoing proxy contest by investment vehicle Boots Capital
Management LLC ("Boots Capital").
In a hearing yesterday, Vice Chancellor J. Travis Laster said that Boots Capital had
presented a colorable claim that Crown Castle's Board's actions
contravened their fiduciary duties under Delaware law when the incumbent directors
expanded the number of seats from 12 to 13 after the appointment of
a new CEO on April 10.
There is threat of irreparable harm in changing the rules in the
midst of a proxy contest, Vice Chancellor Laster further noted in
the court hearing.
The Court granted expedited discovery and a preliminary
injunction hearing to be scheduled in early May, at which point the
Court will assess Boots Capital's preliminary injunction motion,
which will seek potential remedies including a potential delay of
the May 22 annual meeting.
Vice Chancellor Laster had previously ordered, on March 8, that Crown Castle and its Board should
give prior notice to Boots Capital if they were to undertake any
material corporate action that would affect the proxy contest.
Boots Capital believes the Board willfully ignored the
directives of the Court, which resulted in its latest
challenge.
Boots Capital supports the appointment of Steven J. Moskowitz as new Crown Castle CEO. But
when adding Mr. Moskowitz as both executive and new director, the
Board did not reduce the board's overall size, electing to retain
director and interim CEO Anthony
Melone, who had been in his role since January 16. That action expanded the number of
directors to 13 in the critical, late stages of the proxy contest,
thus changing the rules and affecting the fairness of director
elections.
Crown Castle continues to pay Mr. Melone extra compensation as a
Special Advisor to the President and CEO, in addition to its
continued payment of prior CEO Jay
Brown, who was awarded a six-month consulting contract upon
his resignation in January.
"The misguided corporate governance at the Crown Castle Board of
Directors is on naked display for shareholders to see," said
Ted B. Miller, who co-founded the
company and as part of his comprehensive plan to restore value at
the company has nominated himself and three other highly qualified
directors. "Directors are so eager to protect their jobs that they
have willfully ignored corporate governance principles, and have
again damaged their trust and credibility ahead of a shareholder
election. We are tireless in improving Crown Castle because we know
the company can be great. But it cannot be great unless this
self-serving behavior is stopped immediately."
"We call on shareholders to urgently tell the Board that its
actions are unacceptable. It is time for change so value creation
can begin in earnest."
On February 20, 2024, Mr. Miller
nominated a slate of four highly qualified director candidates who
collectively would bring more than five decades of successful
global tower industry experience to the Crown Castle Board. Mr.
Miller and the nominees have presented a detailed and actionable
plan to the Board to optimize the value of Crown Castle's fiber
assets, digitize its tower portfolio, materially improve its
operations and go-to-market strategy, rebuild its management team
with experienced executives, repair its broken company culture, and
deliver significantly improved financials to restore and drive
shareholder value. In addition to this detailed operating plan, Mr.
Miller and the nominees have led and shared with the Company a
six-month due diligence process with 25 prospective buyers and
financing sources to increase the speed and certainty of completing
a sale of Crown Castle's fiber assets this year, before potential
tax benefits of over $1 billion
expire at the end of 2024.
Heyman Enerio Gattuso &
Hirzel LLP, Woolery & Co. PLLC, and Equity Litigation Group LLP
are serving as legal advisors to Mr. Miller.
The case number is 2024-0176-JTL.
INVESTOR AND MEDIA CONTACTS
Investors:
Morrow Sodali LLC
Paul Schulman/William Dooley/Jonathan
Eyl
By Phone: 1-800-662-5200 or 203-658-9400
By Email: Boots@info.morrowsodali.com
Media:
Jonathan Gasthalter/Nathaniel Garnick/Grace
Cartwright
Gasthalter & Co.
By Phone: 212-257-4170
By Email: bootscapital@gasthalter.com
CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING
STATEMENTS
The information herein contains "forward-looking statements."
Specific forward-looking statements can be identified by the fact
that they do not relate strictly to historical or current facts and
include, without limitation, words such as "may," "will,"
"expects," "believes," "anticipates," "plans," "estimates,"
"projects," "potential," "targets," "forecasts," "seeks," "could,"
"should" or the negative of such terms or other variations on such
terms or comparable terminology. Similarly, statements that
describe the Participants' (as defined below) objectives, plans or
goals are forward-looking. Forward-looking statements are subject
to various risks and uncertainties and assumptions. There can be no
assurance that any idea or assumption herein is, or will be proven,
correct. If one or more of the risks or uncertainties materialize,
or if the underlying assumptions of Boots Capital (as defined
below) or any of the other Participants in the proxy solicitation
described herein prove to be incorrect, the actual results may vary
materially from outcomes indicated by these statements.
Accordingly, forward-looking statements should not be regarded as a
representation by Boots Capital or the other Participants that the
future plans, estimates or expectations contemplated will ever be
achieved. You should not rely upon forward-looking statements as a
prediction of actual results and actual results may vary materially
from what is expressed in or indicated by the forward-looking
statements. Except to the extent required by applicable law,
neither Boots Capital nor any Participant will undertake and
specifically declines any obligation to disclose the results of any
revisions that may be made to any projected results or
forward-looking statements herein to reflect events or
circumstances after the date of such projected results or
statements or to reflect the occurrence of anticipated or
unanticipated events.
Certain statements and information included herein have been
sourced from third parties. Boots Capital and the other
Participants do not make any representations regarding the
accuracy, completeness or timeliness of such third party statements
or information. Except as may be expressly set forth herein,
permission to cite such statements or information has neither been
sought nor obtained from such third parties. Any such statements or
information should not be viewed as an indication of support from
such third parties for the views expressed herein.
CERTAIN INFORMATION CONCERNING THE PARTICIPANTS
Boots Capital and the other Participants (as defined below) have
filed a preliminary proxy statement and accompanying GOLD universal
proxy card (the "Proxy Statement") with the Securities and Exchange
Commission (the "SEC") to be used to solicit proxies for, among
other matters, the election of its slate of director nominees at
the 2024 annual meeting of shareholders (the "2024 Annual Meeting")
of Crown Castle Inc., a Delaware corporation ("Crown
Castle" or the "Corporation"). Promptly after filing its
definitive proxy statement with the SEC, Boots Capital will forward
the definitive proxy statement and accompanying GOLD universal
proxy card to each stockholder entitled to vote at the 2024 Annual
Meeting.
The participants in the proxy solicitation are currently
anticipated to be Boots Parallel 1, LP, Boots, LP (and together
with Boots Parallel 1, LP, the "Boots Funds"), Boots Capital
Management, LLC ("Boots Capital"), Boots GP, LLC ("Boots
GP"), 4M Management Partners, LLC ("4M Management
Partners"), 4M Investments, LLC ("4M Investments"),
WRCB, L.P. ("WRCB"), Theodore B. Miller,
Jr. and Tripp H. Rice (collectively, the "Boots
Parties"); and Charles Campbell Green III and David
P. Wheeler (together with Mr. Miller and Mr. Rice, the "Boots
Nominees," and together with the Boots Parties, the
"Participants").
Boots GP, as the general partner of each of the Boots Funds,
and 4M Management Partners, as the investment advisor of
each of the Boots Funds, may each be deemed to beneficially own
interests in an aggregate of 784,009 shares of the Corporation's
common stock, $0.01 par value (the "Common Stock") held
in the Boots Funds (including 182,997 shares of Common Stock and
interests in 601,012 shares of Common Stock underlying
over-the-counter share option contracts). WRCB beneficially
owns interests in 135 shares of Common Stock underlying a call
option. Mr. Miller has direct ownership of 200 shares of
Common Stock, which includes 100 shares of Common Stock held of
record and 100 shares of Common Stock held of record as tenant in
common with his wife. In addition, Mr. Miller may be deemed
to beneficially own interests in an aggregate of 784,716.958 shares
of Common Stock (which includes interests in 784,009 shares of
Common Stock held by the Boots Funds, which Mr. Miller may be
deemed to beneficially own as the President and managing member
of 4M Management Partners and a Manager and the President
of Boots GP, interests in 400 shares of Common Stock underlying
call options owned beneficially and as a tenant in common with his
wife, interests in 135 shares of Common Stock underlying a call
option owned beneficially by WRCB, which Mr. Miller may be deemed
to beneficially own as sole member of one of the general partners
of WRCB, and 172.958 shares of Common Stock held through the
Corporation's 401(k) Plan in the Crown Castle Stock Fund. Mr.
Rice is the record holder of 100 shares of Common Stock and, as the
Vice President of 4M Management Partners and a Manager
and the Vice President of Boots GP, Mr. Rice may be deemed to
beneficially own interests in 784,009 shares of Common Stock held
by the Boots Funds. Mr. Green beneficially owns 1,736 shares
of Common Stock in joint tenancy with his wife. All of the
foregoing information is as of the date hereof unless otherwise
disclosed.
IMPORTANT INFORMATION AND WHERE TO FIND IT
BOOTS CAPITAL STRONGLY ADVISES ALL STOCKHOLDERS OF CROWN CASTLE
TO READ THE PRELIMINARY PROXY STATEMENT, ANY AMENDMENTS OR
SUPPLEMENTS TO SUCH PROXY STATEMENT, THE DEFINITIVE PROXY
STATEMENT, AND OTHER PROXY MATERIALS FILED BY BOOTS CAPITAL AS THEY
BECOME AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION.
SUCH PROXY MATERIALS WILL BE AVAILABLE AT NO CHARGE ON THE SEC'S
WEBSITE AT WWW.SEC.GOV. IN ADDITION, THE DEFINITIVE
PROXY STATEMENT, WHEN FILED, AND OTHER RELEVANT DOCUMENTS, WILL
ALSO BE AVAILABLE ON THE SEC WEBSITE, FREE OF CHARGE, OR BY
DIRECTING A REQUEST TO THE PARTICIPANTS' PROXY SOLICITOR, MORROW
SODALI LLC, 430 PARK AVE., 14TH FLOOR, NEW YORK, NEW
YORK 10022 (STOCKHOLDERS CAN CALL TOLL-FREE: (800)
662-5200).
1 See Transcript of Oral Argument at 91:15-24, 92:1,
Delaware Action (Mar. 8, 2024). (". .
. what I don't want to have happen is to have something unfixable
or unalterable suddenly being announced as an after-the-fact thing,
without the plaintiff having at least some notice – and my instinct
would be five business days – so that if [Plaintiffs] believe that
there is some reason why this would dramatically upset the status
quo and later the proxy contest and could be viewed as some form of
interference with voting rights in its own right, that they would
have an opportunity to come and challenge it.")
View original
content:https://www.prnewswire.com/news-releases/delaware-court-of-chancery-grants-expedition-and-discovery-in-hearing-on-companys-last-minute-expansion-of-board-302118176.html
SOURCE Boots Capital Management, LLC