Legion Comments on Guess Director and Chief Creative Officer Paul Marciano's Shareholder Intimidation Attempts
Legion Partners Asset Management has received a 'cease and desist' letter from Paul Marciano's law firm, which Legion claims aims to silence shareholder dissent. Legion emphasizes that 84% of unaffiliated shareholders voted to remove Marciano from the board at the recent annual meeting. They express concern over the use of corporate resources in this intimidation effort and maintain their commitment to advocate for shareholders' interests. Legion insists that both Marcianos’ presence on the board poses risks to Guess's reputation and valuation amidst ongoing sexual abuse allegations.
- 84% of unaffiliated shareholders voted to remove Paul Marciano from the board, indicating strong support for change.
- Legion expresses concern that corporate resources are being misused to intimidate shareholders and support Marciano.
Legion has Received "Cease and Desist" Letter from Law Firm Representing Mr. Marciano – In What Legion Believes is an Appalling Attempt to Silence a Significant Minority Shareholder
Believes Corporate Resources are Being Used as Part of These Efforts and Calls on Independent Directors to Ensure This Does Not Continue
Legion Will Continue to Advocate for Best Interests of All Shareholders at Guess, Especially in Wake of Significant Mandate for Change Based on
LOS ANGELES, May 9, 2022 /PRNewswire/ -- Legion Partners Asset Management, LLC, together with its affiliates (collectively, "we" or "Legion Partners"), a significant shareholder of Guess?, Inc. ("Guess", or the "Company") (NYSE: GES), today commented on recent attempts by Guess Board of Directors (the "Board") member and Chief Creative Officer Paul Marciano and others to pressure Legion into silence regarding the need for change at Guess. Legion issued the following statement:
"On May 3, 2022, we, along with our advisors, received a letter from a law firm representing Paul Marciano, demanding that Legion 'immediately cease and desist its publication of misleading and defamatory information about Guess Co-Founder Paul Marciano on abetterguess.com.' This letter specifically objected to our posting of legal complaints referencing that Paul Marciano has been the subject of numerous sexual assault allegations. The letter went on to threaten 'immediate[]…legal action against Legion and all others working in concert with it.' Links to this letter and our response are below.
Paul Marciano's actions, in our view, constitute a despicable attempt to harass, intimidate and silence a significant minority shareholder. While Paul Marciano may find it personally distasteful that someone would question his reputation, we stand by our rights as shareholders to call for positive change at Guess – especially in light of the pattern of sexual abuse allegations against Mr. Marciano.
This is not only an attempt to silence Legion – by extension it is an effort to squash the rights of ALL non-insider shareholders who made their voices heard at the Annual Meeting held on April 22, 2022. As a reminder, at the Annual Meeting our proposal to withhold votes on Paul Marciano's reelection to the Board received the support of approximately
We find it particularly disturbing that corporate resources are seemingly being used as part of this campaign of intimidation. For example, Guess's Vice President of Human Resources recently sent copies of a civil extortion complaint filed in Los Angeles Superior Court against attorney Lisa Bloom – who represents a number of Paul Marciano's alleged victims – to us. We call on the independent directors on the Guess Board to confirm whether they are aware that corporate resources may be supporting Paul Marciano's efforts and, if so, to immediately put a stop to such waste.
Although the Annual Meeting has passed, we will continue to push for the voices of all shareholders to be heard. While we have taken down our campaign website as part of the normal course end of a proxy campaign, this is not an indication that we have acquiesced to any of Paul Marciano's demands, nor is it a reflection of our future intentions with regard to Guess.
We continue to believe that Paul and Maurice Marciano's continued presence on the Board (and, in the case of Paul, as an officer of the Company) pose an unacceptable risk to Guess's reputation and valuation. And, most strikingly, it is extremely distasteful that the independent members of the Board would continue to overlook the mounting number of sexual abuse allegations against Paul Marciano. A basic sense of decency – as well as adherence to their fiduciary duty – necessitates that these independent directors take action."
The letter from Paul Marciano's attorneys can be found here: https://legionpartners.com/wp-content/uploads/2022/05/2022-05-03-Letter-re-Cease-Desist.pdf.
Legion's response letter can be found here: https://legionpartners.com/wp-content/uploads/2022/05/2022-5-6-Ltr-from-Keech-to-Holley-re-Response-to-Correspondence-Dated-May-3-2022.pdf.
About Legion Partners
Legion Partners is a value-oriented investment manager based in Los Angeles, with a satellite office in Sacramento, CA. Legion Partners seeks to invest in high-quality businesses that are temporarily trading at a discount, utilizing deep fundamental research and long-term shareholder engagement. Legion Partners manages a concentrated portfolio of North American small-cap equities on behalf of some of the world's largest institutional and HNW investors.
Media Contact:
Longacre Square Partners
Dan Zacchei / Joe Germani
dzacchei@longacresquare.com / jgermani@longacresquare.com
1 Unaffiliated / non-insider shareholders exclude officers, directors and employees of the Company.
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SOURCE Legion Partners Asset Management
FAQ
What was the content of the cease and desist letter received by Legion Partners?
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What are Legion's concerns regarding Guess's board and Paul Marciano?
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