Battle Royale

The fight for the future of Carver Federal Savings Bank has turned public... and ugly

VS. BBOC
Cohee and BBOC had looked at entering the New York market. Cohee and Williams spent $1.35 million to buy 170,700 shares of Carver Bancorp stock in March 1999, which amounted to about 7.4% of Carver’s voting power. The deal made BBOC one of Carver’s largest single stockholders. Combined, Carver bank employees own about 8%.

Presenting himself as a candidate for CEO of Carver, Cohee first sought to merge the two institutions. He proposed Carver purchase BBOC at a premium and hire him and his wife to manage the new entity. Carver officials feared that Cohee and Williams, who own nearly two-thirds of BBOC and a commanding share of Carver, would use their influence to seize control of the bank. Carver officials interpreted the move as a takeover attempt and balked. Their board of directors ultimately chose someone else to take the helm-Debbie Wright.

The move would not have been noteworthy had Wright and Cohee never met. But Wright and Cohee are old acquaintances. Both CEOs are the products of Harvard. Cohee went on to use his finance skills in the corporate sector, while Wright put her business acumen to work rebuilding neighborhoods. Both represent a new breed of African American entrepreneurs, those who have used their sterling credentials, mainstream business and political experience and powerful Rolodexes to build up black-owned enterprises.

Early last April, with Wright named to take charge of Carver, a second merger proposal from BBOC was rebuffed. Award round two to Carver. In this fight, however, round three would feature jabs and damaging blows from both sides, with Cohee taking the offensive.

Cohee’s big break came in August 1999, as two seats on the board of d
irectors-those of David Dinkins and David Jones-would come up for election at Carver’s annual stockholders’ meeting. BBOC nominated two of its executives to the eight-member board: Cohee and Williams. With a commanding portion of Carver stock, and a little shareholder support, it seemed likely BBOC would win the two board positions. But Carver’s board of directors called off the shareholders’ meeting. The action prompted BBOC to file a lawsuit to force one.

Wright maintains the company did not announce a 1999 shareholders’ meeting because she needed time to “get [her] arms around the organization. I was a new CEO, literally,” she says. “We felt it would be prudent to wait.”

But after Wright was put in place, there would have to be a meeting and the inevitable vote. The board settled BBOC’s lawsuit in November 1999 by scheduling a meeting for February 24, 2000.

In the meantime, Wright announced that Morgan Stanley and Provender would invest $2.5 million in Carver in exchange for preferred voting stock. The deal, completed one month before the February shareholders’ meeting, gave Morgan Stanley and Provender 208,000 shares of stock, or a combined 8.25% equity stake in Carver. Officials from BBOC claimed that Wright sold stock to her allies, with full knowledge that they would vote for incumbents Dinkins and Jones. Wright denied the accusations. BBOC immediately countered with a second

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