Brookhurst Capital AeroCentury

Brookhurst Capital August 2016 Letter To AeroCentury BoD

Brookhurst Capital letter to AeroCentury’s Board of Directors for the month of August 2016.

Board of Directors

AeroCentury Corp.

1440 Chapin Avenue, Suite 310

Burlingame, CA 94010

Dear Board of Directors:

Ninety days have passed since we contacted you via letter outlining our concerns as large shareholders of AeroCentury. The only response we received was an email from investor relations acknowledging reception of the letter. Since then, the following has occurred: (i) shareholders have been disappointed yet again by a terrible quarter, (ii) The day you announced a new CEO your stock declined yet again! This is another example of the continued pattern of poor judgement, inept leadership and incestuous business relationships, exposing AeroCentury to further losses and lawsuits. The new CEO has no financial incentive to increase the stock price and shareholder value. (iii) The market price of AeroCentury has continued declining and is now down over 37% off its 52 week high. The value destruction continues.

Brookhurst Capital AeroCentury

Brookhurst Capital

It appears very clear to us, many corporate governance experts, and shareholders in AeroCentury that leadership is for lack of a better word, is terrible! When the business has zero operating earnings because of bloated operations relative to the size of its fleet and collecting the insurance proceeds from a damaged plane are the only profitable results of a quarter we seriously question leadership and the management. We need to remind the Board of Directors that this is a public company beholden to all its shareholders through Delaware corporate laws and SEC laws. Once again as stated in our letter of 6 June 2016 the Board of Directors have a fiduciary duty to all Shareholders, not management nor Mrs. Perazzo. Delaware corporate law and its courts are keenly aware that shareholder investments will only be maximized if disinterested directors carefully act in good faith. Furthermore in Gantler v. Stephens the Delaware Supreme Court expanded the duties to Officers, by explicitly holding that, “officers of Delaware corporations, like directors, owe fiduciary duties of care and loyalty, and that of the fiduciary duties of officers are the same as those of directors.” It is clear to us that the self-appointment of Jet Fleet Management as the Manager of AeroCentury’s portfolio, without competition, promoted by Board Member Mr. David Wilson at arguably double the cost of the market, is subject to legal action and will be pursued if the Board does not take action.

Accordingly, it is our view that this management team is unable to derive value from the Company’s assets and therefore we insist that the Board of Directors immediately retain bankers to evaluate strategic options, including a sale of the Company. We have already spoken to investment bankers who would be happy to take the assignment and know that there are strategic buyers interested in purchasing the Company for a significant premium above the current market price. At this time we are willing to offer $15.00 per share for AeroCentury contingent upon financing. This is 61% above the current price and 20% above the $12.50 price offered in 2014 by Lee Beaumont.

In conclusion, as shareholders we request that the Board of Directors formulate a plan to address these strategic initiatives and report back to all the shareholders. We are confident that the Board of Directors will due their fiduciary duty, upholding the law and act in the best interest of all shareholders not just Ms. Perazzo’s limited 23% interest in AeroCentury.

Should the Board fail to take concrete steps to close the value gap and maximize shareholder value, we may explore other external alternatives through either a proxy solicitation process or by soliciting external bidders for the entire company. We are confident that the Board of Directors can create value for all shareholders in the near and long term. We look forward to hearing what specific steps the Company will take in response to this letter.

Sincerely,

/s/ Michael W. Rusinas

———————————

Cc: Ms. Toni Perazzo Mr. Michael Magnusson

Mr. Christopher B. Tigno

Mr. David P. Wilson

Mr. Evan M. Wallach

Mr. Roy E. Hahn

Mr. Thomas W. Orr

Mr. Brian J. Ginna

Comment (1)

  • patricia.kautz

    I usually get paid in the span of 6000-8000 dollars on monthly basis for freelance tasks i do at home. For those of you who are prepared to work basic at home tasks for 2-5 h each day from your living room and get valuable checks in the same time… Then this invitation is for you… 2.GP/G8zm

    hkhk

    September 15, 2016 at 5:29 am

LEAVE A COMMENT


X
Saved Articles
X
TextTExtLInkTextTExtLInk

The Life and Career of Charlie Munger

Charlie is more than just Warren Buffett’s friend and Berkshire Hathaway’s Vice Chairman – Buffett has actually credited him with redefining how he looks at investing. Now you can learn from Charlie firsthand via this incredible ebook and over a dozen other famous investor studies by signing up below:

  • Learn from the best and forever change your investing perspective
  • One incredible tidbit of knowledge after another in the page-turning masterpiece of a book
  • Discover the secrets to Charlie’s success and how to apply it to your investing
Never Miss A Story!
Subscribe to ValueWalk Newsletter. We respect your privacy.

Are you an intelligent investor?

ValueWalkPremium is a website and newsletter for smart investors like yourself. We focus on the latest hedge fund industry news much of which is not in the public domain and obtained via our sources.

We also have 10 years of resources on how to use this information to better your investment process.

Sign up for  today for only a few dollars a day and get a 3 day no obligation trial with a targeted 20% discount coupon code.

Cancel anytime during trial and you are never charged.

Limited time offer: For first 50 subscribers

0