Two cases were selected in 2001 to demonstrate the processes by which investors, acting independently in a common interest, could replace directors who were unresponsive to shareholder concerns:

Lone Star Steakhouse

Willamette Industries

The successes of independent investor efforts in both cases established the feasibility of value enhancement practices in the current marketplace.

Summaries and selected records of both Forum programs are presented below. 

      Responding to widely reported shareholder dissatisfaction with the company’s management, an analyst with a $40,000 budget and an interest in starting a new career as an activist fund manager nominated himself for the board seat of Lone Star’s founder CEO.

      The Forum program was initiated in June 2001 to address investor concerns about management’s use of litigation and other tactics to stop the dissident’s campaign.  The stated purpose of the Forum was to support shareholder rights to make informed decisions about the alternative board candidates, without endorsing either one.

      Forum communications provided investors with a free and open exchange of information, unconstrained by management litigation and without conventional proxy contest expenditures.  At the July 2001 annual meeting, the founder CEO lost his board seat with 56% of the votes cast in favor of the neophyte activist.

      A Forum program was initiated in May 2001 to address increasing investor concerns about Willamette management’s personal biases in refusing to reasonably consider a proposed business combination with Weyerhaeuser.

      A Weyerhaeuser slate of director candidates won a close contest for the third of Willamette’s classified board seats that was up for election at the June 2001 annual meeting. Management nevertheless continued to refuse explorations with Weyerhaeuser until mid-December 2001, when Willamette announced it was negotiating a strategic asset transaction that would block the proposed Weyerhaeuser combination.

      Two Forum participants responded to management’s continued obstructive tactics with litigation. Another stated its intent to nominate director candidates for the next annual meeting, so that shareholders would be assured the opportunity to elect dissidents to another third of the board and thus secure a majority even if Weyerhaeuser abandoned its effort.

      Within weeks of the independent shareholder actions, in January 2002, Willamette management capitulated and agreed to a Weyerhaeuser combination that allowed Willamette shareholders to realize the $6.1 billion value of their company.