UPDATED March 4, 2014, with comment from Coppersmith Capital.
The proxy war over control of the board at ConMed (NSDQ:CNMD) turned ugly this week after serious allegations surfaced against 1 of the medical device company’s nominees for director.
ConMed earlier this week struck a deal with Coppersmith Capital Management that unseated ConMed founder Eugene Corasanti’s chairmanship and added Coppersmith managing partner Jerome Lande and former Stryker (NYSE:SYK) CFO Curtis Hartman as directors effective March 1.
Yesterday, another activist investment firm that assailed ConMed late last year re-entered the fray. Voce Capital Management, which has its own slate of proposed board members, reiterated accusations against Hartman originally aired in the war for control of diagnostics giant Alere (ALR).
Citing an Alere proxy statement filed in August 2013, Voce alleged that Stryker settled "multiple" sexual harassment allegations made against Hartman during his time in Kalamazoo, Mich.
"[S]ources disclosed that Mr. Hartman was the subject of multiple allegations of sexual harassment during his tenure at Stryker and that these allegations were settled confidentially for substantial monetary payments. Specifically, we learned that 3 sexual harassment claims against Mr. Hartman were settled by Stryker, including 1 after he ceased to be interim CEO, and we believe that these events may have been a factor contributing to Mr. Hartman being passed over for the full-time CEO position," according to the Alere filing.
"Alere didn’t just float these charges as a trial balloon, nor whisper them behind closed doors; it was confident enough to publish them in a press release and then file it with the SEC. Why would a sophisticated, publicly-traded company have made such salacious allegations which, if untrue, could be defamatory and could result in significant liability and punitive damages – unless it believed it had a firm basis for making these statements?" Voce managing partner J. Daniel Plants wrote yesterday in a letter to ConMed’s shareholders.
The appointment of Lande to ConMed’s board is aimed at undoing damage done to his good name during the Alere proxy war, Plants alleged.
"Voce believes ConMed’s shareholders deserve to know what has changed since then to justify the appointment of these gentlemen to ConMed’s Board now. In fact, Voce interviewed Mr. Hartman as a potential nominee for its slate of directors and passed him over for that role in part due to these concerns," he wrote. "We believe the facts demonstrate that Mr. Lande’s true motivation in finagling his ConMed Board appointment is the rehabilitation of his reputation, which was tarnished by the Alere debacle."
A Coppersmith spokesman refuted the allegations made by Plants and Voce in an email to MassDevice.com.
"The Voce letter contains baseless allegations and false and misleading statements directed at Curt Hartman and Jerome Lande. The historical allegations have been refuted in detail and are on the public record – a fact Voce deliberately ignored. These are vicious personal and professional attacks that are entirely unjustified, create serious questions about Voce as a fiduciary, deserve scrutiny by regulators and do nothing to advance the goals of change and value creation," spokesman Dan Gagnier wrote.
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