Providence Service Corporation Announces That Avalon Correctional Services Has Abandoned Its Consent Solicitation
04 March 2009 - 12:01AM
PR Newswire (US)
TUCSON, Ariz., March 3 /PRNewswire-FirstCall/ -- The Providence
Service Corporation (NASDAQ:PRSC) today announced that Avalon
Correctional Services (Pink Sheets: CITY) has abandoned its
disruptive and distracting consent solicitation against Providence.
"We are delighted that Avalon and its controlling stockholder,
Donald E. Smith, have finally recognized that continuing their
consent solicitation is not in the best interests of ALL Providence
stockholders. We look forward to moving beyond this unnecessary
distraction and returning our full time and attention to delivering
on Providence's very significant potential and enhancing value for
ALL Providence stockholders," said Fletcher McCusker, Chairman and
CEO. "While we would have much preferred to focus our time
elsewhere such as on our numerous ongoing initiatives to enhance
stockholder value, we were not going to allow ONE dissident
stockholder group to intimidate or bully us into acceding to their
demands so that they could further their own personal agenda. The
Providence Board and management strongly believe that Providence
must be run like any other public company - for the benefit of ALL
stockholders - and are committed to doing just that. We are very
confident that Providence is moving in the right direction. "Given
Don Smith's record of operating Avalon like it was his personal
property and his very public record of taking actions, such as
voluntarily delisting from Nasdaq and terminating the registration
of Avalon's shares, so as to cease being required to comply with
the corporate governance and public disclosure requirements imposed
by Nasdaq and the SEC, we are confident that our stockholders would
have been quick to seriously question his commitment to corporate
governance issues and wonder whether this consent solicitation was
not being driven by some ulterior motive. We find it interesting
that, notwithstanding their expressed concern with our corporate
governance, at no time in any of our in-person or other
interactions with Avalon did they ever approach us with suggested
changes to our Bylaws or corporate governance policies or attempt
in any way to contact us or engage in any dialogue with us about
our Bylaws or any other corporate governance matters prior to their
filing of their Consent Solicitation Statement, choosing instead to
thrust Providence directly into a costly, disruptive and
distracting consent solicitation. As we have previously said, we
believe that this consent solicitation was intended to benefit, not
ALL the stockholders of Providence, but only Avalon and Don Smith
by facilitating their quest for substantial influence and effective
control over Providence. "The decision by Avalon to abandon its
consent solicitation came only a few days after Providence made it
abundantly clear that it was not going to make changes to its
bylaws to facilitate Avalon's ability to engage in proxy contests
against Providence. Among other things, Avalon was seeking to
prevent Providence from being able to (a) obtain necessary and
relevant information regarding a candidate's background and
qualifications, (b) have the candidate confirm that he or she is
not a party to any agreements that would interfere with the ability
of such candidate, if elected as a director, to comply with their
fiduciary duties under applicable law, (c) require the candidate to
comply with the Company's insider trading, confidentiality,
corporate governance, conflicts of interest and other corporate
policies and guidelines and (d) fully and properly inform
stockholders of any matters that a stockholder may bring before an
annual meeting of stockholders." Mr. McCusker concluded, "We have a
strong foundation of solid corporate governance practices. Our
committees are already 100% independent and our board is already
two-thirds independent. As we demonstrated with the bylaw
amendments that the Providence Board adopted on February 24, 2009,
our Board is committed to adopting best practices in corporate
governance irrespective of how those best practices come to our
attention. However, we will continue to vigorously protect the
interests of ALL stockholders from a dissident stockholder, such as
Avalon, that would seek to utilize limited company resources to
advance narrow interests or personal agendas and distract
Providence and our management team from their continuing focus on
enhancing stockholder value and acting in the best interests of ALL
Providence stockholders." About Providence Providence Service
Corporation, through its owned and managed entities, provides home
and community based social services and non-emergency
transportation services management to government sponsored clients
under programs such as welfare, juvenile justice, Medicaid and
corrections. Providence does not own or operate beds, treatment
facilities, hospitals or group homes, preferring to provide
services in the client's own home or other community setting. The
Company provides a range of services through its direct and managed
entities to over 74,000 clients through 870 contracts at September
30, 2008, with an estimated six million individuals eligible to
receive the Company's non-emergency transportation services related
to its LogistiCare operations. Combined, the Company has a nearly
$1 billion book of business including managed entities.
Forward-Looking Statements This press release contains
"forward-looking statements" within the meaning of the Private
Securities Litigation Reform Act of 1995. Words such as "believe,"
"demonstrate," "expect," "estimate," "anticipate," "should" and
"likely" and similar expressions identify forward-looking
statements. In addition, statements that are not historical should
also be considered forward-looking statements. Readers are
cautioned not to place undue reliance on those forward-looking
statements, which speak only as of the date the statement was made.
Such forward-looking statements are based on current expectations
that involve a number of known and unknown risks, uncertainties and
other factors which may cause actual events to be materially
different from those expressed or implied by such forward-looking
statements. These factors include, but are not limited to the
global credit crisis, capital market conditions, and other risks
detailed in Providence's filings with the Securities and Exchange
Commission, including its Annual Report on Form 10-K for the fiscal
year ended December 31, 2007. Providence is under no obligation to
(and expressly disclaims any such obligation to) update any of the
information in this press release if any forward-looking statement
later turns out to be inaccurate whether as a result of new
information, future events or otherwise. DATASOURCE: Providence
Service Corporation CONTACT: Fletcher McCusker, Chairman and CEO,
or Kate Blute, Director of Investor and Public Relations, both of
Providence Service Corporation, +1-520-747-6600; or Alison Ziegler
of CAMERON ASSOCIATES, +1-212-554-5469, for Providence Service
Corporation Web Site: http://www.provcorp.com/
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