Daily News: August 12, 2013

Ackman Slams J.C. Penney Board Colleagues in Open Letter

The Huffington Post reported that board member and activist investor Bill Ackman, founder and CEO of Pershing Square Capital Management, sparked turmoil on Friday (8/9/13) when he issued an open letter slamming his colleagues for their incompetency and accusing some of J.C. Penney’s directors of placing their personal agendas ahead of the health of the company.

Ackman, who is said to own nearly 18% of Penney’s shares, urged the board to immediately replace chairman of the board, Thomas Engibous and chief executive officer, Myron E. Ullman, who returned as CEO about four months ago to stem sales declines blamed on Ron Johnson. The Post quotes Ackman as saying, “I have lost confidence in our chairman’s ability to oversee this board. Penney is at a very critical stage in its history and its very existence is at risk. In recent weeks, our board has ceased to function effectively.”

In a statement made on behalf of J.C. Penney’s board, chairman Thomas Engibous fired back and said, “The company has made significant progress since Myron E. (Mike) Ullman, III returned as CEO four months ago, under unusually difficult circumstances. Since then, Mike has led significant actions to correct the errors of previous management and to return the Company to sustainable, profitable growth.”

Engibous concluded his statement by saying, “The board of directors strongly disagrees with Mr. Ackman and is extremely disappointed that his letter was released to the media at the same time that it was sent to the board. Mr. Ackman has been integrally involved in the board’s activities since he joined two years ago. This includes leading a campaign to appoint the company’s previous CEO, under whose leadership performance deteriorated precipitously. His latest actions are disruptive and counterproductive at an important stage in the company’s recovery.”

To read the entire Huffington Post article, click here.

To read the full J.C. Penney Chairman statement, click here.

Previously on abfjournal: Bloomberg: J.C. Penney Says CIT Still Funding, August 1, 2013