Former CEO Challenges Board’s Deal with Activist Investor
A lawsuit has been filed by Crown Castle co-founder Ted Miller and his investment vehicle, aiming to overturn an agreement struck between the company’s board and Elliott Investment Management. Miller, who played a pivotal role in launching Crown Castle back in 1994 and later served as CEO, argues that the agreement provides Elliott with certain governance rights without tying it to maintain an equity stake in the company. This, according to Miller, creates a significant misalignment between Elliott’s short-term profit goals and the long-term vision of Crown Castle, a prominent player in wireless-communications towers.
While a representative for Elliott has chosen not to comment, the lawsuit filed in the Court of Chancery of the State of Delaware raises concerns over the validity and enforceability of the agreement, citing Delaware law.
Pushback on CEO Changes and Board Replacements
Late last year, Elliott voiced its recommendations for Crown Castle to make substantial changes such as replacing the CEO, refreshing the board, and re-evaluating its fiber strategy. In response, Crown Castle initiated a series of changes, including the resignation of then-CEO Jay Brown. As part of an agreement with Elliott, the company committed to assessing its fiber business and welcoming two new directors to its board, one of them being Jason Genrich from Elliott’s team.
Miller recently initiated a proxy fight to secure four board seats but faced rejection from Crown Castle, which dismissed both his and the other nominees’ submissions after careful deliberation. The company emphasized its disagreements with assertions made by Miller and his investment vehicle, Boots Capital Management, during the lead-up to the proxy battle. In a letter from their legal representatives, Crown Castle refuted claims made by Miller, labeling them as inaccuracies that distort the true nature of the relationship between Crown Castle and Elliott.
The legal battle between key stakeholders of Crown Castle continues as they spar over governance rights and strategic decisions for the company’s future.
