Article from: www.thenewspaper.com/news/18/1895.asp
8/2/2007Internal Battle for Control of Photo Ticket Company
Internal power struggle grips Rhode Island red light camera vendor Nestor, Inc.
Despite being fired in May, the former CEO of the troubled red light and speed camera vendor Nestor, Inc. has launched a bid to retake the company he had run since April 2003. William B. Danzell is angry that its board named Clarence A. Davis his permanent replacement as CEO on July 27.
Last month, Danzell purchased the amount of stock he needed to bring 50.3 percent of Nestor shares under his control through his investment firm, Silver Star Partners. As reported in the Providence Journal, Danzell attended a meeting of the board of directors the following day and insisted he either be made chairman of the board or that Davis be fired from the board along with one other member.
After consideration, the board balked. Danzell faxed a letter asserting that he was in control and had named new directors to the board. The board ignored the letter and on June 8 it voted to impose an $86,000 fine on Danzell for violating Nestor's ethics rules. The board ignored a second faxed letter from Danzell on June 11.
Much of the ownership controversy stems from the company's poor financial position. Although Nestor saw a 45 percent increase in revenue from new photo ticket installations, the company still reported a net loss of $3,469,000 in the last six months. Nonetheless, a group of investors headed by landfill owner Edward F. Heil and the Sanders Morris Harris Group poured $5 million into the company. On this news, Nestor stock rallied to a high of 93 cents Tuesday before dropping back to 81 cents yesterday. The company is desperate to raise its price above $1 by October before it is kicked off of the Nasdaq Capital Market stock exchange.
Source: Nestor execs in heated dispute (Providence Journal (RI), 8/1/2007)
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